Budget 2008: Saving must be priority
Making savings a priority must top of the agenda for Alistair Darling's first Budget.
The chancellor of the exchequer presents his Budget to parliament next week and the Nationwide Building Society is calling on him to reform the ISA system to encourage more people to save.
The building society has written to the chancellor with a series of recommendations to encourage saving.
Graham Beale, Nationwide chief executive, said: "Alistair Darling has an opportunity to introduce changes that can make a real difference to people's wealth in his first Budget as chancellor.
"The ISA system has proved to be a success with over 16 million accounts in operation, but more can be done to encourage consumers to use their ISA allowance and embrace the tax-efficient benefits they bring.
"And in order to build a savings habit in younger people, we would like to see Alistair Darling encourage more parents to contribute to their children's trust funds and do away with the current tax inequality."
The Nationwide ISA proposals include a withdrawal buffer to allow savers to take cash out and put it back in their ISA within the same tax year - something that, it is hoped, would encourage people on lower incomes.
There are also calls for ISA limits to rise with inflation and cash and 'stocks and shares' ISA limits to be equalised.
Within child savings, Nationwide is calling for tax exemption thresholds for interest earned on savings for children by parents to be increased and further government contributions when a child hits 11 - as 60 per cent of Child Trust Funds currently see no extra investment from parents.
Mr Beale concluded: "We hope the chancellor takes this opportunity, to make clear his commitment to saving by making it a priority."
The Budget takes place on March 12th.
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