Five billion reasons to be efficient

TAX-FREE SAVING: here and on pages 14 to 15 we show how to avoid paying the Revenue more than we should do

You Pay tax as you earn it, so why pay again when you save it?

A recent survey by IFA Promotion, an organisation which puts people in touch with independent financial advisers, found that as a nation we pay pounds 5.5bn more in tax every year than we need to, which is equivalent to pounds 158 a head.

There is now a multitude of tax-free or tax-favoured ways of saving. The least risky include a range of National Savings products and Tessa accounts. Personal equity plans (PEPs), which are fundamentally about stock market investment, have proved increasingly popular. Pensions - whether company-provided or personal plans - remain the most tax-favoured way of saving.

The Government has given notice that in 1999 it plans to introduce Individual Savings Accounts (ISAs), which are likely to incorporate Tessas and PEPs. There will be a long consultation process before we know what the ISA rules will be.

As the value of the state pension declines, we also know that the Government wants to encourage members of the public to save much more so that they can have a comfortable retirement.

Tony Lyons