Ann Foster, chairperson of the Financial Services Consumer Panel, has stated at a recent PEPs and ISA Managers Association conference that tax incentives just offer another layer of complexity onto savings plans and confuse the public. She said that it was the lower paid who tended to benefit less from tax incentivised savings plans and that it was the wealthy who tended to benefit.
She suggested that a free generic advice service should be offered to the lower paid to ensure that they become aware of the more tax efficient ways to save
Our view
Great thought - we only suggested this to the Treasury and the FSA - 4 YEARS AGO!!!!
We suggested that a Financial Aid Board, similar to the Legal Aid Board (now the Legal Services Commission) for legal help, should be set up the help the lower paid. E.g. each person on lower income be issued once every three years with a £100 voucher entitling them to a consultation with an approved adviser for two hours or so. The idea is still there - the problem is still the same - people will only ever take advice if they really think they need it - and most people think they could do our job of professional advice "standing on their heads".