11/04/03

Commenting on today's budget announcements, the ABI said:

On the taxation of life insurance and savings policies

"The Government has very sensibly decided to re-examine Ron Sandler's recommendation on qualifying policies and the tax treatment of the 5% withdrawal in the context of a wider look at the taxation of savings. The ABI has emphasised to the Chancellor the dangers of making piecemeal changes to the tax system without ensuring that there is a genuinely level playing field in tax terms for all kinds of saving. We would, for example, want to see the full ISA limit applied to insurance as well as to mutual funds.

“Today’s announcement will reassure many thousands of pensioners and savers whose income would have been at risk. We are pleased that the Government has taken this view.

“It is disappointing that the Government has not yet increased incentives for savers more generally. The ABI has put forward a number of concrete proposals in our response to the Pensions Green Paper. It is vital that measures are introduced to help close Britain’s savings gap."

On the decision to freeze the rate of Insurance Premium Tax

"There is actually a strong case for reducing IPT, which is a tax on prudent behaviour. But we are glad that the Chancellor has not moved to raise this tax."

On the announcement of efforts to reduce barriers to competition in financial services within the EU

"The ABI has been lobbying hard to create a more open market for insurance and financial services within the EU. For this, it is important that there is free and fair competition between companies, wherever they are based and whoever owns them. European consumers can only benefit from greater and fairer competition in financial services."

Provided by the ABI