A report from the Centre of Policy Studies, which outlined a plan to change the current financial incentives issued by the Treasury, proposes to combine the annual contribution limits for ISA and tax-relieved pension saving into a single limit of between £30,000 and £40,000.
Jason Chapman, managing director at discount broker Willis Owen, is in favour of this measure as it will provide incentives for the heavily taxed highest earners in the UK to save for their retirement.
"An increase on the ISA limit is likely to provide a welcome boost to retirement saving. The lion’s share of our investors take up their full allowance each year, attracted by the tax benefits and flexibility that ISAs provide," he said.
"We encourage the Treasury to take the CPS’s proposals seriously, especially if speculation that George Osborne will curb pension tax relief for higher earners in his Autumn statement proves correct."
"The Government needs to consider a wide range of additional measures to encourage retirement saving."
AWD Chase de Vere’s Patrick Connolly (pictured right) says the change would be a step forward."This idea of combining the annual contribution limits of ISAs and tax-relieved pensions has been bandied around for quite some time now. I think this is going to happen some time in the not-so distant future."
"Across the board we have seen more investors with a long term-savings plan moving from pensions to ISAs, which has been quickened by the government constantly fiddling with pensions."
"It would give investors more flexibility with their savings and so I can see it as a natural progression."
Darius McDermott, managing director of Chelsea Financial Services, says that the idea is a sound one but more needs to be done to incentivise high earners to hold pensions.
"I have long since wondered about combining the contribution limits of ISAs and pensions. However, I think the limit would have to be much higher than between £30,000 and £40,000 a year."
"There needs to be more tax incentives for investors going into these pension plans, as we want people to be encouraged to use them," McDermott (pictured left) said. "Higher earners are being forced to contribute more and more tax to the state. Why not give them more of a tax incentive into their retirement savings plan?"
"One argument is that increasing ISA limits would only help middle England and above, and some may argue: 'Why should they need any more assistance?'"
"That being the case, my view is that the more people are encouraged to save today, the less they will need to rely on the state tomorrow."
Brian Dennehy, managing director at Dennehy & Weller, does not think the change would be a good idea.
He says that this is the latest in a long line of over-complicated measures and the Government should just leave the current pension system alone. "No I don’t think this combination is a good idea, not at all. We have enough issues surrounding pensions as it is," Dennehy (pictured right) commented.
"We need to simplify our savings plans, so simplify VCTs, EISs, capital gains tax and national insurance."
"There are currently very limited tax advantages as it is, so they should focus on tax-incentivising pensions. The whole advantage of savings plans should be the tax benefit, so there is no need to confuse people further."
"Keeping it simple is the name of the game, I think," he finished.