This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
FOOL'S EYE VIEW
By
The Chancellor of the Exchequer, the lovely Gordon Brown, is due to make his pre-budget speech later this month. No-one knows when exactly because a date hasn't been set yet! It seems strange really considering he knows that he has to make this sort of speech every year around this time so you'd think he'd have got his diary dates sorted out. Anyway, when he does get his act together, I really hope he's got something up his sleeve for savers. At the moment we're only saving about 5% of our disposable income in spite of the fact that many of the Chancellor's actions over the past few years have been specifically designed to encourage the nation to save more. He's already introduced the tax-saving ISA, not to mention the Stakeholder Pension, and earlier this year he announced plans to contribute public money to savings funds for new-born children. So why aren't we saving? Personally, I think it's because it's all so complicated. Let's take ISAs, for example. The idea of being able to protect your savings and investments from tax is obviously a good one. If we can avoid handing over any of our dosh to the Treasury we're going to jump at the chance, right? Unfortunately, although ISAs are very popular with savvy members of the public, they've got all sorts of silly rules that just lead to a great big muddle for us ordinary folk. Why have the differentiating Mini and Maxi ISA, for instance? As you may know, you can invest £3,000 in a Mini - depending on what type of Mini it is – but if you go for a Maxi you can put as much as £7,000 in it as long as only £3,000 of your investment in a Maxi is devoted to cash savings. Otherwise you can put all £7,000 into investment vehicles. Eh? You may also know that we can't transfer shares directly into an ISA without having to sell them first and then buy them back inside the ISA. Unless they're a certain type of share option, of course! We've already paid stamp duty once so why make us pay it again? And why do we have to pay 20% tax on the interest on floating cash whilst we're trying to make up our minds which shares to buy next? For goodness sake! Wouldn't it be easier just to say you can put £7,000 worth of cash or shares into a Maxi each year and save or invest it in whatever proportion you want and be done with it? Do away with the Minis altogether, don't charge tax on anything inside an ISA and let us transfer shares we already own at no extra cost. Apart from anything else, it'll surely cut the amount of bureaucratic paperwork involved. The Stakeholder Pension is certainly simpler in terms of rules and regulations but pension schemes are pretty incomprehensible in themselves. And he still hasn't done anything to tackle the question of why we have to use most of the fund to buy an annuity. It'll be interesting to see what the Chancellor says when he announces more details of this plan for new-born babies, particularly as his wife is due to produce his first-born in the near future. In theory every new baby will get at least £250 to put towards a Child Trust Fund until they're reach 18 or 21. Parents, relatives and friends will apparently be able to contribute too. Sounds simple, doesn't it? But will it turn out to be yet another mind-boggling form of saving that people will not quite understand? If you're not quite sure how ISAs and Stakeholder Pensions work, we got a guide for each of them which explains them in more detail. Let's hope the new Child Trust Fund will be so simple to understand that we'll be able to explain it in three minutes flat. Somehow I doubt it though!