Shake-up needed for UK savings

A think tank has called for the government to shake up the UK's saving system in order to encourage more people to prepare properly for retirement so they do not have to face old age in debt.

The Centre for Policy Studies said that the current system was confusing and complicated and recommended that ISAs and pensions be combined, with an overall contribution limit of £45,000.

The think tank also suggested that people should be allowed to access their pensions before they retire and that they should not be forced to buy an annuity when they reach 75.

Other suggestions in the report were that any unused savings should be allowed to pass down to their heirs tax-free and a recommendation for mini-ISAs to encourage under 16s to save.

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