BSA believes Government should act to support savers and homeowners
Ahead of the Emergency Budget on 22 June, the BSA has written to the Chancellor of the Exchequer highlighting the issues that face savers and borrowers in the current economic environment. Adrian Coles, Director-General of the BSA commented:
“The backdrop to the Emergency Budget is one of highly challenging economic conditions as the Government seeks to shift focus from indebtedness to savings. The lowest Bank Rate in over three hundred years makes it difficult to attract retail deposits and in turn this has compounded the difficult issues faced by all institutions in accessing the wholesale markets. We are calling upon the Government to encourage savers, and maintain support for mortgage borrowers who may face difficulties in today’s austere environment.”
ISAs
“It would be extremely helpful to have an early commitment by the Coalition Government to keeping Individual Savings Accounts (ISAs) and to, at least, retaining the real value of the annual subscription limits. We would like to see two-way transfers of ISAs, so that stocks and shares ISAs can be transferred to the cash product, as well as vice versa.”
Child Trust Funds (CTFs)
“Whilst the removal of Government support is not unexpected, we believe the true value of the CTF, promoting financial capability in the next generation, would only have been seen over the long term. We hope the Government will be open to working with the sector to explore other ways that the original aims of the CTF might be delivered.”
An equitable savings platform
“We would strongly urge that NS&I is not set a positive funding target for this year, or next, as this could distort the savings market given that NS&I is in receipt of a 100% government guarantee.”
Repayment programme by Financial Institutions
“The BSA is calling upon the Government to carefully assess whether and how the aggregate plans for repayment by all institutions of funding from the Credit Guarantee Scheme and Special Liquidity Schemes are consistent with the likely overall size of the wholesale and retail markets. The BSA believes there is a danger of significant strain that could lead to further disruption to both mortgages and savings, and that the Government should review the current repayment programme.”
Support for homeowners
“We are calling upon the Government to maintain funding to help financially vulnerable homeowners at risk of losing their home. We believe there is a real need to review the effectiveness of current schemes, and commence a redevelopment of the public and private sector safety net, which should include revision of the current Support for Mortgage Interest programme. We also believe that the structure of Stamp Duty Land Tax should be reformed as the current system results in the bunching of transactions at prices just below the thresholds for different rates.”
Banking Levy
“We welcome the support for mutual financial institutions as stated in the Coalition’s Programme for Government. We also note the plan to introduce a levy on banking and stress that should any levy be introduced it should be proportionate to the risk of a bank’s activities or appropriation of excess profits -whether to shareholders or to management.”
~ Ends ~
Notes to Editor:
1. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 50 UK building societies. Mutual lenders and deposit takers have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £235 billion, 19% of the total outstanding in the UK. They hold almost £250 billion of retail deposits, accounting for just under 22% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
2. Photographs of Adrian Coles are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
3. A copy of the BSA submission to the Chancellor of the Exchequer can be found by following this link http://www.bsa.org.uk/policy/response/emergency_budge_submission.
4. Contact
Fiona Cornes
fiona.cornes@bsa.org.uk
020 7520 5926
-01.png){kind=spacer}