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ABI: Savings friendly Budget needed

ABI: Savings friendly Budget needed

Category: Savings

Updated: 19/03/2010
First Published: 19/03/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Savers must not be penalised in the forthcoming Budget, the Association of British Insurers (ABI) has insisted.

The Chancellor of the Exchequer, Alistair Darling, is to unveil the 2010/11 Budget next Wednesday, and there are fears that cutbacks could affect savers.

The association said that recent Budget measures to have harmed savers, including changes to the higher rate of tax relief for pension contributions and the change to Capital Gains Tax which impact on insurance bonds.

Research found that 55 per cent of Britons said the benefits of saving had gone down, while just 11 per cent thought they had gone up.

Two thirds of respondents said that they would be left in a poor financial position if they were made unemployed, suggesting minimal savings provisions have been made.

"Insurers agree that it is important that the economy is rebalanced by facilitating saving, not just relying on debt," Kerrie Kelly, director general of the ABI, said.

"Both consumers and UK insurers need the tax system to treat long term savings products with greater respect, underpinned by stable rules.

"Further changes in the Budget will further harm consumer's attitudes to saving."

The ABI also said more help for UK companies was needed, asking for a firm commitment to allow profits made in foreign branches not to be taxed when brought back to the UK.

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