InvestmentsMay 12 2015

Further calls for savings policy re-think

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Further calls for savings policy re-think

Wealth manager Brewin Dolphin believes that this parliament should prioritise financial policies that support savings and encourage self-reliance and has called on the Conservatives to introduce a number of policies.

Chief executive David Nicol wants to see policies that will teach children the financial basics from a young age, encourage people to save for higher education and their own retirement, focus on long-term investment and make it easier for people to pass on their assets.

During the general election campaign, Brewin Dolphin set out a seven point manifesto of its own, detailing suggestions around the extension of financial education in schools and encouraging early saving by giving Junior Isas the same 25 per cent uplift as new Help to Buy Isas.

It also called on the new government to limit the total sum that can be contributed into a pension fund, rather than penalising investment performance by capping its eventual size, along with accelerating the mandatory contribution into pensions via auto-enrolment, with a pledge to increase contributions to 10 per cent by 2020.

Also on pensions, Brewin Dolphin requested the introduction of a 30-day cooling off period prior to pension pot withdrawal, to help protect vulnerable retirees and underpin the need for professional financial advice.

In terms of tax, they are looking for reform of the capital gains tax system, cutting the rate to 10 per cent after ten years and to zero after twenty, while also increasing the threshold and reducing the time limit on lifetime gifts from seven to five years.

Mr Nicol added: “It is important that the new government focuses on building a strong economy which is vital for the well-being of the UK and all investors in it.”

This follows calls from the Savings and Investments Policy project who since March 2014 have been meeting all the major political parties, HM Treasury, DWP and the FCA, outlining possible ways for the financial services industry can work together to maintain momentum from recent initiatives and to create a financially resilient society.

The policies proposed by TSIP include havaing a dedicated savings minister, as well as increasing financial capability.

Tony Stenning, chairman of TSIP and head of UK retail at Blackrock, said: “The [savings minister] would be accountable for promoting and championing all forms of consumer saving within government – an essential role if we are to overcome the current culture of consumption fuelled predominantly by debt.

“Saving, benefits everyone, ensuring growth, stability and prosperity for the future of the UK and its people. A failure to narrow the savings gap could adversely affect the UK’s GDP, so it is of critical economic as well as social importance.”

peter.walker@ft.com