TISA calls for a national savings strategy

TISA (Tax Incentivised Savings Association), the premier trade association in the UK retail savings and investments industry, is calling on Government to help create a national savings strategy to integrate saving throughout consumers' lives.

In its Pre-Budget submission to HM Treasury TISA outlines its vision for a Savings for Life culture which it says can be achieved by adopting a joined-up approach to the range of savings options available to meet the lifetime needs of the individual or family.

Tony Vine-Lott, TISA Director General says: "The stark reality is that the savings ratio is at an all-time low and this must be addressed by all of us in the industry and by Government. I believe that by enabling the consumer to see how options for savings link together and by increasing the use of the ISA model we have an opportunity to make a real difference very quickly."

TISA's submission highlights five essential recommendations:

Development of a Workplace ISA attracting an employer's contribution and with limited access to savings, similar to a Child Trust Fund only for adults. This would also be an attractive alternative to Personal Accounts for those disinclined to take up a pension.

Auto enrolment into Employer based Stakeholder Pensions or Workplace ISAs as soon as possible.

Linking Save As You Earn schemes and the new Saving Gateway to ISAs.

The direct transfer of trivially commuted pension pots into an ISA.

Transfer of ISA savings and investments to the surviving partner on the death of a spouse without leaving the ISA wrapper.

"Coupled with the existing suite of savings products in the UK - Child Trust Funds, ISAs, SAYE schemes and the new Saving Gateway and Personal Account - these five recommendations will do much to encourage saving for life events, such as starting a family, buying a first home and retirement. It will enable people to look forward to a more financially secure retirement," adds Tony Vine-Lott, "ISAs are also a particularly attractive option for those on low incomes who are unwilling to lock their money away in a pension fund."

TISA is optimistic that Child Trust Funds (CTF) will bring great benefits to future generations as they learn early on the benefits that savings bring. To enhance the CTF, TISA would like to see an increase in the initial payment to £300 to counter the effects of inflation, since the original sum (£250) was introduced six years ago, also for this amount to be index-linked. The Association would also like to see a third CTF payment introduced at Secondary School age.