Isas and pensions 'should be brought closer together'

The Centre for Policy Studies has called for a radical simplification of the UK savings framework.

In a new report entitled 'Simplification is the key: stimulating and unlocking long-term saving', the think tank calls for the pensions and Isa regimes to be simplified and brought closer together.

The centre calls for an annual contributions limit of £45,000 a year for all tax-incentivised savings, with a maximum £35,000 for pensions.

Fluidity between Isa and pension savings should be introduced through a combination of some pre-retirement access to pension savings and, at retirement, retrospective tax relief on Isa assets being re-nominated as pension savings, the report says.

It also calls for partners to be able to fund each other's pension pots and receive tax relief, irrespective of their own earning circumstances.

Commenting on the proposals, David Nish, chief executive at Standard Life, said the savings industry needs to help create a long-term consensus amongst politicians about how to close the savings gap.

"Greater certainty and simplicity of tax incentives are a key part in achieving this," he stated.

The current annual tax-free Isa allowance for UK savers is £10,200.

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2010-06-14 08:32:27 © Moneyextra.com