You are here: Home - Saving & Banking - Understanding -

BLOG: Has the Chancellor forgotten about Britain’s savers?

Written by:
Saving is a socially responsibly thing to do and the Government needs to do more to incentivise it, writes Aldermore Bank's Simon Healy.

Delivering the Autumn Statement or indeed the Spring Budget has not always brought the best of headlines for George Osborne. Caravans, grannies and more memorably – pasties, brought a great deal of scorn and negativity for the Chancellor in budget of 2012.

However, 2013 has been different and in the eyes of most commentators, a good year for Mr Osborne’s reputation. Statistics will show that the UK never suffered a double-dip recession, the economy grew at the fastest rate in Europe and the UK leads the way across the continent for attracting foreign direct investment.

This news is welcome for individuals and businesses up and down the UK, but are we missing a trick here? The Chancellor is correct to address issues to help businesses and the property market, but what about the savers?

There was much anticipation in the run up to the Autumn Statement that the Chancellor would provide some incentives to those looking to put some money away. Yet, there was nothing radical and nothing of great note.

Next year’s ISA limit will be increased to £11,880, as will the Junior ISA and Child Trust Fund to £3,840, which is always welcome for those who can afford to put away that little bit extra, but the wider issues of why people choose not to save and how to incentivise them is yet to be addressed in any measure.

Savings need to be flexible to allow people to maximise what risks they can take and what they put aside. As the Chancellor confirmed today, the retirement age will increase to 69 by the 2040s, people may well be contributing towards their pension and retirement for longer, but it still doesn’t mean that they are saving enough.

As well as increasing the ISA limit to as much as £20,000, where are the measures that allow people to be flexible between their cash ISA or stocks and shares ISA? Why the delay in admitting peer to peer lending as part of the ISA wrapper?

There is a political agenda of course, but naturally there is an economic one too. Call it the paradox of the thrift, but most people understand that it is sensible to get people spending again before we can start to look at getting people to put away something for a rainy day, but it shouldn’t undermine developing a savings culture in the first place.

Making a healthy return on your savings has been difficult enough in recent years and as Tuesday’s figures from the Bank of England show, savers are withdrawing money from their accounts at the fastest rate for nearly 40 years. The Government should not see this as a short-trend that will recover in time. Saving is a socially responsible thing to do and needs to be recognised by the Government and the tax system.

How many more reports does the Government need to hear that we aren’t saving enough? It’s time to take some real action.

Simon Healy is managing director for savings at Aldermore Bank.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • RT @procopywriters: Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the #freelance la…
  • RT @procopywriters: Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the #freelance la…
  • RT @procopywriters: Self-employed workers lose an annual average of twenty days chasing unpaid invoices. As the growth of the #freelance la…

Read previous post:
House prices leap 7.7% in 12 months

UK house prices have risen by 7.7% in the past year according to the latest house price index from Halifax.