The efficiency and effectiveness of the UK’s tax breaks with regards to saving is coming under “increasing scrutiny”, according to one leading insurance group.
Homeowners who have been put off saving could be encouraged to use the value of their property to boost their income by using a lifetime mortgage.
Insurance firm AEGON has released a consultation paper calling on the government to devise a new approach to get people saving as the current tax system is “complex and inflexible”.
Francis McGee, the firm’s head of corporate affairs, said: “We have a long and welcome tradition in this country of using the tax system to encourage saving, especially for the long term.
“But the efficiency and effectiveness of tax breaks has come under increasing scrutiny, and policymakers have undermined them by constantly tweaking the system.”
Lifetime mortgages, like other equity release products, can provide homeowners with a tax-free cash lump sum, which could be used to boost their retirement funds.
Posted by Claire Ford
