Increasing SAYE saving limits would help low earners

During a parliamentary debate on saving earlier this week, Financial Secretary to the Treasury Ian Pearson MP confirmed that a third of the 2 million employees who are saving in an Save As You Earn (SAYE) employee share plan earn less than £21,000.

ifs ProShare, the not-for-profit membership body that acts as the voice of the employee share plans industry in the UK, believes that this evidence further strengthens their call for the maximum amount employees can save in SAYE plans to be increased to £400.

At present, the maximum amount of money an employee can save in an SAYE plan is £250 a month, a limit that has been in place since 1991. If this had been raised in line with inflation the limit would now stand at over £400.

Phil Hall, Head of ifs ProShare, said: "Employee share plans are utilised by employees with low, middle and high incomes because they provide benefits to all.

The Treasury revelation that a third of SAYE savers earn less than £21,000 a year supports our claim that increasing the amount employees can save in an SAYE Plan would help those on relatively low incomes as well as those earning larger sums.

Once again, we call on the Government to raise the amount of money that employees can save in SAYE plans to ensure that employees are able to save more."

ifs ProShare also highlighted the fact that SAYE plans are an ideal location for employees to save despite the difficulties faced by the UK economy.

Hall added, "SAYE plans are a risk free, tax efficient method of saving that also offer the potential to achieve sizeable investment growth. The current economic volatility does not change these basic principles."

For more information about employee share ownership or ifs ProShare please visit: ifsproshare.org