Chiseller's blow
THIS week's complication comes in the guise of an incentive to save. Ministers have learned with well-projected horror that some people scarcely save at all. To encour- age them, new and tax-friendly Individual Savings Accounts are to be sold in super- markets. No one will be allowed to have more than £50,000 of these ISAs, and since PEPs and Tessas will be classed as ISAs, that limit will apply to them too. So we shall all be encouraged to save £50,000 and then stop. Then when we reach retirement age we can use it to buy an annuity which at today's rates will be worth £4,500 a year, losing value with inflation and, like the state's pension, dwindling away into a shop- ping voucher. As an incentive to save I find this underwhelming. It looks more like a chiseller's blow, to chip away at tax reliefs and move towards a Min Tax.
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