Quarter of consumers fear reduction in ISA allowance and tax relief cuts

Written by Oliver Wade
03/01/2018

A quarter (24%) of people fear a reduction in the ISA allowance, while others worry about cuts to pension tax relief and death benefits, according to a survey conducted by AJ Bell.

The survey revealed that 15.5% of respondents are concerned about the removal of pension death benefits, while 15% are worried about the removal of higher rate tax relief on pensions and 14.7% fear a reduction in the pension annual allowance.

Commenting, AJ Bell senior analyst Tom Selby said: “The fact almost a third of savers are worried the Government will cut pension tax relief and 24% fear a reduction in the ISA allowance perhaps suggests expectations of hand-outs are in short supply.

“Despite this there are some simple steps both policymakers and the industry can take to help struggling savers.”

Furthermore, AJ Bell found that almost 55% of savers would be encouraged to save more if the government offered greater incentives.

Selby added: “It’s probably no surprise to see most savers want the Government to give them more incentives to save, although whether this is realistic at a time when Brexit uncertainty continues to grip Westminster is another matter.

However, just under 30% of savers would be satisfied with simple investment solutions to meet certain needs, while 29% argued that fewer changes to the rules would encourage them to save more.

The research highlighted that almost two-thirds (60%) of savers struggle with picking their own investments, while 17% struggle to understand the tax implications and 11% bewildered by pension rules.

“The world of investments remains a black box of complexity for most people, perhaps unsurprising given the bewildering selection of funds available. For those struggling to decide what to do, low-cost, ready-made solutions could well provide a suitable solution, although careful monitoring remains essential,” Selby concluded.

    Share Story:

winners-banner

Specialist FTB and BTL markets
Adam Cadle talks to Vida Homeloans director of sales - mortgages Louisa Sedgwick about the specialist first time buyer and buy to let markets

Newsletter

Subscribe to our newsletter to receive breaking news by email.




MoneyAge welcome
MoneyAge Editor Adam Cadle discusses the brand and what is on offer

World Markets (15 minute+ time delay)