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Pima says Personal Accounts should link to Isas

Pima has called for Personal Accounts to be linked to Isas to create a more joined up approach to savings.
In its response to the Government’s White Paper, Pima says a percentage of monies taken into Personal Accounts should be allowed to be filtered into Isas.
Pima says the move would put consumer demand and consumer’s real life needs at the heart of pension reform by harnessing the popularity of Isas.
It says the ‘artificial’ distinction between medium and long-term savings should be scrapped and the Government should build on the work of the Savings and Retirement Account- proposed in the past by the Tories- as a way of increasing flexibility in savings.
Pima says a savings framework which allows for a seemless transition from Child Trust Fund to Isa to pension/Personal Accounts is required.
The Government is due to publish its Isa review this year with the expectation that it will continue to promote the savings vehicles in a similar way.
Blairite thinktank the Institute for Public Policy Research has recently voiced its concerns about Isas claiming tax incentives could be distributed more progressively and floated the idea of an NPSS-style model for Isas.
Pensions minister James Purnell also used a recent IPPR event to call for a more joined up approach to medium to long term savings across Government.
Pima director-general Tony Vine-Lott says: “The most important thing policymakers can do is to put consumer attitudes and behaviours at the heart of reform. PIMA believes that linking CTFs and Isas directly to pensions and personal accounts will create a system that reflect consumers‚ own thinking on savings.
We have long supported a flexible, transparent savings mechanism for pensions something that personal accounts may achieve if developed in consultation with those groups who serve and represent consumers.”

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