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News Release from: Motley Fool | Subject: ISA
Edited by the Insidemoneytalk Editorial
Team on 14 March 2008
Fool.co.uk comments on the Budget
Consumers must save themselves out of a recession
David Kuo, Head of Personal Finance at Fool.co.uk, says: "We are disappointed that Chancellor Darling has done nothing in today's Budget to encourage British households to ride out an impending recession through saving "Failing to increase ISA allowances further[1] is a poke in the eye of savers who need encouragement to put away money
This article was originally published on Insidemoneytalk on 15 Mar 2007 at 8.00am (UK)
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Fool.co.uk calls for further simplification of ISAs
Virtually all savers find the plethora of rules governing ISAs confusing according to new research (1) by independent personal finance website Fool.co.uk.
Increasing ISA allowances by 3% after nine years is not good enough.
andldquo;Currently, our savings ratio2 stands at 2% compared to 8% historically.
Or to put it another way, we are only saving £1 out of every £50 that we earn.
So, a typical family with a combined income of £50,000 is only putting away £1,000 a year for a rainy day.
£However, just because the Budget has ignored savings doesn't mean that we should too.
A recent study[3] predicts that Fool.co.uk's Inflation Index[4], which is running at 7%, will continue to dwarf inflationary wage rises of 3%.
This could further impinge on the shrinking savings ratio.
"Fool.co.uk therefore urges homeowners to revisit their household budgets and make cut backs without delay.
Any savings should also be parked in ISAs to take advantage of the tax breaks.
"Unlike the Chancellor, who is putting up umbrellas in the face of a hurricane, households need to batten down the hatches for a rainy day." 1.
Cash ISA limit increases from £3,000 to £3,600 from 6 April 2008.
Stocks and shares ISA limits will be £7,200.
2.
ONS: Household sector: Use of disposable income (2007).
3.
Fool.co.uk report: Your finances in 2012.
4.
Fool.co.uk: The Government is still underestimating inflation (3 July 2007).
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