ISAs fail to encourage savers, claims think-tank
Monday 25 April 2011
Individual savings Accounts (ISAs) have failed in their purpose to encourage savers, particularly among the "squeezed middle", and should be scrapped, claims a damning report published today.
According to research by the Institute for Public Policy Research (IPPR), less than a third of families with a weekly income under £600 hold an ISA and 44 per cent of families who earn less than £200 a week have no form of savings at all.
Meanwhile, more than half of low-to-middle earning families hold savings worth less than one month's income.
ISAs were introduced in 1999 in the hope of encouraging more people – especially those on lower incomes – to build savings. However, the IPPR said its analysis shows the main beneficiaries of the tax relief offered by ISAs have been those who would have been likely to save anyway.
As a result, the think-tank is calling for ISAs to be replaced by a new type of savings account which would see a "bonus" paid on a sliding scale, with the amount capped once the balance reaches an average of £3,000.
IPPR director Nick Pearce said: "Our research shows that people on low-to-middle incomes want simple savings accounts with few terms and conditions, little in the way of small print and paying an easily understandable reward."
- 1 Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
- 2 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 3 People who sleep more than eight hours are more likely to have a stroke, research shows
- 4 Kanye West climbs on table at Nando's to crowd chants of 'Yeezus' before Brit Awards 2015 performance of 'All Day'
- 5 New theory could prove how life began and disprove God
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...