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Dont forget savings Mr Darling ABIs message for the PreBudget Report

‘Don't forget savings in the Pre-Budget Report' is the ABI's message to the Chancellor, Alistair Darling, ahead of Monday's Pre-Budget Report. The ABI is calling on the Chancellor to recognise the value of savings to individuals and to the economy as a whole with two specific measures to boost saving. While Mr Darling is widely expected to announce measures designed to increase spending and consumption, he must also recognise the value of saving as an economic stimulus. Long-term saving enables financial institutions to extend more credit, which itself helps to boost the economy.

The ABI is calling for two specific measures to be announced in the Pre-Budget Report:

  • The overall Individual Savings Account (ISA) limit should be raised from £7,200 to at least £10,800 a year. This will give individuals an extra incentive to benefit from tax-efficient savings, and will help to boost the stock market and encourage a better overall investment climate.
  • Automatic enrolment into workplace pensions, which is due to begin in 2012, should be brought forward and introduced as soon as possible. If it were to start in 2010, it could lead to additional long-term savings in excess of £500 million by 2012.

Stephen Haddrill, the ABI's Director General, said:

"Savings are vitally important to the UK economy, and while we support the need to stimulate spending and growth, saving must not be ignored as a means of lifting and keeping the economy out of recession. Saving is the lifeblood of financial services - it widens the availability of credit and stimulates investment in other sectors of the economy. The Government has a golden opportunity to boost workplace pension saving by enabling automatic enrolment now. The pensions industry, employers and the rest of the private sector is ready to deliver auto-enrolment as soon as the green light is given.

"Increasing ISA limits would give the millions of existing ISA savers, plus many more potential new ones, an added incentive to increase their tax-efficient savings, while giving a positive boost to the stock market."

Last updated 01/07/2016