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Simpler products &#39give more motivation to save&#39

The Government should no longer rely on tax incentives to motivate people to save as there is little evidence they have been successful in increasing the overall level of saving says Ron Sandler.
While not going so far as to suggest the Government should scrap exisiting tax incentives such as Isas, which would cause too much disruption to the marketplace, Sandler believes by simplifying products and literature, people will be more motivated to save.
The call flies in the face of much of the industry&#39s thinking about how to convince more to save for their retirement.
The ABI has made tax incentives a lynchpin of its proposals to close the savings gap, and disagrees with Sandler&#39s view that they do not have a place.
While others in the industry do not believe simplification as Sandler has proposed will increase saving, saying in the absence of incentives, compulsion must be considered.
Sandler&#39s report says: “There is little evidence that tax incentives can significantly increase the overall level of saving.”
NAPF PR manager Andy Fleming says: “Both simplification and incentives have a place in motivating people to save. Compulsion should be viewed as an option of last resort, incentives through the tax system must be tried first.”
ABI head of life and pensions Francis McGee says: “We do think there is a place for incentives in motivating saving.”

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