Long-term savings: A political issue |
|
|
|
Published
:
Mon, 14 Mar 2005 01:00
|
Invesco Perpetual research says that it is now up to the political parties to try and rectify investors’ lost faith after its study found out that many people lacked confidence in long-term savings.
In fact, the Turner Commission's report found out that there was a shortfall of £57 billion in pension savings with 30 per cent decline likely in pensioners’ incomes.
| All the more, the study said, the government needed to come out with price matching schemes, where the Government matches savers contributions, as 43 per cent of people were in favour of it.
Other options which received “thumbs-up” from the savers were extension of ISA limits (21 per cent) and tax incentives (27 per cent). However, flexible pension options didn’t find much favour with the savers, as only 3 per cent of them said they would save under the schemes, the study said.
Invesco Perpetual said the research clearly shows that if the Government introduces a price matching system it would be a clear winner. Today, more and more investors want greater incentives to save. In other words, more incentives is key to restoring investors’ faith and trust in the savings industry, the study said.
The Financial Services Authority (FSA) said the pensions’ savings gap is widening which can be a serious threat to the UK economy. Surely there is a more evidence of a savings gap with consumers' expectations for retirement and their saving and borrowing behaviour being out of line, FSA said.
Invesco also found out that half of those people surveyed said that they were willing to change their party allegiance if a completely tax free savings offering was made.
At present, both the Conservatives and the Labour Party have savings schemes that meet the above requirements.
Under the Conservatives’ Tory Lifetime Savings Accounts scheme, an individual's savings is matched in cash by the Government with add-ons like immediate access to their cash when needed.
While the Labour Party’s Savings Gateway scheme provides individual a pound for pound Government-funded match for all money saved, but up to a certain limit.
|
|
|
|
|
|
Print this Story
