How can banks and the government help you save more?
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Former_MSE_Wendy
Posts: 929 Forumite
The British Bankers’ Association (BBA), the representative body for UK banks, wants to know what banks should be doing to encourage people to save more.
They are interested in your answers to the following (you don’t have to answer them all):
What could banks do to encourage their customers to save?
What other policies by governments and regulators could encourage more people to save?
Should the government consider ending taxation on all savings products?
Why do British people save less than those from than many other countries?
The BBA has called for the creation of new work-based savings products that workers could transfer to different employers. Would you support this and if so why?
Email your ideas to thefutureofsavings@bba.org.uk by Fri 22 Aug and also share them below by clicking ‘quick reply’.
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They are interested in your answers to the following (you don’t have to answer them all):
What could banks do to encourage their customers to save?
What other policies by governments and regulators could encourage more people to save?
Should the government consider ending taxation on all savings products?
Why do British people save less than those from than many other countries?
The BBA has called for the creation of new work-based savings products that workers could transfer to different employers. Would you support this and if so why?
Email your ideas to thefutureofsavings@bba.org.uk by Fri 22 Aug and also share them below by clicking ‘quick reply’.
[threadbanner]box[/threadbanner]
If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our Forum Intro Guide
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Comments
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Raise savings rates and increase the cost of overdrafts and credit cards. But why do they need to ask? Do they want to unleash an unpopular plan and this is a way to fend off criticism, by saying they asked the public first?0
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Two things banks can do. First is increase interest rates on savings accounts, but I guess they wont do that.
Second is to make it harder to get credit, then instead of buying things on credit and paying off later people will get used to saving up for things instead.
As for government, I think the changes to NISA is a very good step forward, as well as allowing AIM shares inside ISAs. It makes them so much more flexible and encourages you to keep the savings in tact to maintain the tax free status. I think removing income tax on bank interest in general is a bad idea.
A workers based savings product sounds like it would be quite complex and confusing, like most people find pensions. Alternatively you could allow employers to pay money into an fixed term NISA in the employees name before they pay tax, similar to how pensions work, so they get tax relief for saving. It wouldnt be linked to the employer so could be managed just like any other NISA and the same max contributions apply.
But I also think its about someones mindset, and this comes down to education and upbringing. My parents always save money, never get into debt and that is my mindset too. My gf on the otherhand has parents that spend all their money and save nothing. Its no coincidence she acts the same way.Faith, hope, charity, these three; but the greatest of these is charity.0 -
Sounds like they want to drum up support to get taxation of interest scrapped or reduced, which would encourage people to lodge more money in savings accounts without the banks having to pay any more interest at all.
Nice.
...if you're a bank CEO.I am one of the Dogs of the Index.0 -
Banks: Make Offset savings accounts more commonly available- ideally as an add-on to existing mortgage products. Interest rate paid at 0%, but reducing the interest paid on the mortgage account.
Government: Give guarantees (for what that's worth) on "no more adverse changes" to pension/ISAs legislation over the next "x" years. If you want more people to save for their future, you need to increase confidence in these products. The threat of a reduction in the TFLS, and LA discourage people from saving.0 -
Should the government consider ending taxation on all savings products?
Totally daft idea. The people that need encouragement to save are those who will be nowhere near the new ISA limit (or even the old ISA limit for that matter) Making all savings tax free will benefit millionaires but have no impact on getting people to save who are not currently.
What could banks do to encourage their customers to save?
What other policies by governments and regulators could encourage more people to save?
Why do British people save less than those from than many other countries?
How about a scheme that allows you to save small amounts from your gross salary? Because it comes out before tax and before the money gets to your bank account it is then less noticeable and allows you to build up a pot.
It would have to be small amounts to stop abuse by those who are already saving large sums and to encourage those who have no savings at all.
No idea why we save less. It would be interesting to know the relative numbers for different countries.Remember the saying: if it looks too good to be true it almost certainly is.0 -
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Perhaps we save less because we have the NHS, so having a savings pot to pay for doctors' bills or hospital stays doesn't loom large in our minds.0
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I like this idea!How about a scheme that allows you to save small amounts from your gross salary? Because it comes out before tax and before the money gets to your bank account it is then less noticeable and allows you to build up a pot.
And agree, it would be interesting to know the relative numbers for different countries.0 -
Here's a good chart. Can display various years as well: http://www.gfmag.com/global-data/economic-data/916lqg-household-saving-ratesIt would be interesting to know the relative numbers for different countries.
I reckon that a lot of the relatively low savings rate is due to the "buy now, pay later" and 0% interest for purchases culture that has been very prevalent in the early part of the millenium, and is on the rise again. Spending more than you have seems almost obligatory for many people.0 -
Dropping income tax levels on higher earners would be one good way to get more money into savings.
I can pretty much guarantee that every pound I pay less in tax would be a pound saved or invested. It could be paid for by doing away with the personal tax-free allowance for lower earners, too. That would not have much effect on savings, as lower earners don't save much anyway.
Edited to add, this isn't really a very serious proposal, I suspect it'd not prove very popular with most people...0
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