Make this a savers' Budget

TISA - Tax Incentivised Savings Association - is urging the Chancellor to take the first steps towards creating a National Savings Strategy in next week's Budget.

Government incentivised savings schemes already exist but some work better than others. TISA says that few dovetail sufficiently to create a meaningful platform for private individuals saving for life.

Tony Vine-Lott, TISA Director General says: "The reality of the credit crunch is hitting home and more and more people are recognising the importance of saving or paying off debt. The Chancellor has the ideal opportunity to build on this momentum and encourage people to save for their long term financial security.

"But in order to achieve this we need a holistic savings framework that encourages regular saving and can reflect the different financial needs of an individual throughout their life."

Individual Savings Accounts (ISAs) are an excellent example of a modern day savings vehicle, TISA points out. ISAs have the flexibility for short term saving to meet emergency expenditure as well as encouraging financial provision for old age by allowing a pool of investment funds to be built up within a tax free wrapper.

TISA is recommending the immediate implementation of five straightforward improvements:

Introduce workplace ISAs to allow employer contributions

Permit the transfer of ISA holdings between husband and wife/civil partners without leaving the ISA wrapper on death of a partner

Decide now that on maturity a Child Trust Fund will be automatically transferred into an ISA

Agree to the direct transfer of 25% tax free pension drawdown into an ISA, outside of the individual's annual subscription limit

Convert the new Saving Gateway account into an ISA after the two year contribution period.

"Taking these steps would be far more beneficial than merely raising the ISA annual allowance" comments Tony Vine-Lott, "They would make people think very carefully about the importance of committing to savings on a life long basis. Similarly I would like to see a commitment from the Chancellor to make ISAs the savings mainstay of the future."