In the spring, TRA-la
HERE's a useful runner in the Budget for Savings Stakes, to be staged, surely, by John Major in the spring. This one, trained at the London School of Economics by Professor Mervyn King, is called TRA — Tax-free Retirement Accounts. We could each of us put up to £2,500 a year in an account run by an approved manager (bank, building society, unit trust manager and so on) and let the capital and interest pile up free of tax until the TRA's owner is 60. Then there might be a bonus. There would be a bar or a tax penalty on taking the money out earlier. Nothing could be simpler, which the trainer rightly thinks is a merit. TRAs could run happily alongside PEPs, personal pensions, additional pen- sion contributions and the rest of the present apparatus. They might (says Pro- fessor King) be seen as a privatised version of National Savings, with good interest rates guaranteed by competition between banks and building societies. He argues that the public sector is good at tax breaks (a monopoly supplier, after all) and the private sector is good at marketing them. I don't see why Mr Major should stop short of privatising National Savings. But TRAs will do well for a start.
Previous page
