View more on these topics

Before and after tax plans aim to simplify savings

A former managing director of Merrill Lynch is calling for simplification of the savings industry and the removal of reliance on Government subsidy as a way of solving current savings problems.

Charles Jackson, in a pamphlet entitled, Saving Savings: How to Promote Personal Investment, published by thinktank Politeia says present obstacles to saving, including high costs, tax, regulation and inflexibility, could be swept away by the introduction of two simple, clear schemes.

His proposal includes a before-tax scheme which would allow people to save income free from tax, as they can now in pension schemes, and pay income tax when they withdraw money.

The after-tax scheme would allow savers to save out of tax-paid income and withdraw without further tax liability, as is currently the case with Isas.

A saver would be allowed to invest in either scheme or both and could withdraw savings or invest them whenever they want. Investments in the schemes would be free from income and capital gains tax.

Jackson says the problem with current Govern-ment and Opposition initiatives, such as the child trust fund or lifetime savings account is they rely on subsidy. Jackson claims this puts unnecessary constraints on savings because of Government concerns over expense.

Jackson says that subsidies add to the problem of savings cannibalisation, with people moving money into subsidised savings accounts but not increasing the amount they save. He says an increased savings culture can only be introduced by replacing subsidies with simplification.

He says: “Rather than attempting to solve the problem by inducing people to save more by subsidising them with their own or other people’s money, we should solve the problem by minimising the obstacles to saving and relying on savers’ enlightened self-interest to do the rest.”


Odey takes over pan-European fund

Hugh Hendry is to be replaced as manager of the pan European fund at Odey Asset Management by Crispin Odey, the groups chief investment officer. He will also be replaced as manager of the Odey continental European portfolio by Feras Al-Chalabi, but will continue to manage the Eclectica hedge fund. Hendry is understood to be […]

Venture values

Time could be running out for IFAs to learn the worth of investing in venture capital trusts.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm