MARKS & SPENCER FINANCIAL SERVICES PRE-BUDGET COMMENT

MARKS & SPENCER FINANCIAL SERVICES PRE-BUDGET COMMENT Government urgently needs to tackle savings gap issue Ahead of Gordon Brown's Budget statement on 9th April 2003, Marks & Spencer Financial Services highlights some issues that need to be addressed and proposes some solutions. THE ISSUES The Government must act now. New research by Marks & Spencer Financial Services identifies a new generation of 18-34 year olds who are increasingly less able to save and reluctant to do so: The Savings Squeeze - Less able to save in the traditional 'pre and post children' life- stages - Increased levels of debt from education, housing and lower disposable income and a "want it now/have it now" attitude - Less able to rely on older generation with growth in value of inheritance forecast to slowdown and less able to rely on employer - less company pension schemes A generation in denial - Four fifths of young people expect to retire early and only 14% expect to work after 65. - Two thirds of 18-34 year olds expect inheritance to part fund their retirement, but only 22% of 65+ years olds have received an inheritance of more than £5,000 - Nearly 90% of adults under 35 understand importance of saving but nearly half (45%) have no interest in doing so. THE CALL TO ACTION As sources of historical retirement funding decline such as the state, inheritance and employers, Marks & Spencer Financial Services calls for an holistic approach to savings to encourage a new generation of savers and asks the Government to: Simplify and improve access - Although steps have been taken to simplify products, legislation and access there is an urgent call to action to implement, as every day that passes the crisis just gets deeper. Educate - Introduce compulsory financial awareness modules throughout the education life stages, to make consumers more aware of the range of financial products, enable them to purchase with confidence and understand the need to save. Change attitudes - Launch a campaign backed by the Government, industry and consumer groups to raise consumer awareness of the need to save and to encourage them to take responsibility for doing so Incentivise - Incentivise private pension savings through contribution matching schemes, additional tax breaks for employer contributions and reconsider the proposed move to abolish the 10% tax credit reclaim for equity ISAs from 6 April 2004. To speak to Alan Rensch, Technical Manager, Marks & Spencer Financial Services or for further research details, please call the press office on 01244 686 669 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/04/04/20030404BIT00620/wkr0001.doc http://www.waymaker.net/bitonline/2003/04/04/20030404BIT00620/wkr0002.pdf