As the Chancellor readies to address the nation at the first Autumn Budget of the new Government on 30th October, Moneybox, the saving and investing platform supporting more than 1m customers across the UK, urges the Government to prioritise measures that are proven to boost financial resilience and long term prosperity across the UK.
With Moneybox’s recent research finding 76% of aspiring first-time buyers (FTBs) are calling out for the government should do more to support them, Moneybox is calling for the Chancellor to consider the near-term, pragmatic measures which can provide tangible support for FTBs, as well as longer term measures to enable the next generation of wealth creation across the UK. With 29% of UK adults saying they felt they had missed out on opportunities because of a lack of financial confidence, and 15% not confident at all they will have a comfortable retirement, there is a clear need to act now.
This means not only enacting policy to enable the next generation of homebuyers, but also to foster a culture of saving, investing and planning later in life to build the future financial resilience of the nation.
With this in mind, Brian Byrnes, Head of Personal Finance at Moneybox outlines the key areas of reform Moneybox is calling for in the Autumn Budget:
Enable the next generation of homebuyers
“For decades, homeownership has been viewed as a cornerstone of financial security and one of the most effective ways to accumulate wealth due to the potential for equity growth over time. Now, with a new government in place, we have the opportunity to collectively consider how we can create a more equitable market where everyone has the opportunity to achieve the goal of homeownership.
“The government has been clear that its mission is to ‘increase prosperity and enable wealth generation across the nation’ and stands to reason that supporting FTBs onto the ladder is a key part of this. However, its commitment to build 1.5m affordable housing over the course of the next Government is complex and could take time to bear fruit.”
“It’s for this reason that we’re advocating for the government to prioritise near-term pragmatic measures, such as future-proofing the Lifetime ISA, which remains a crucial tool for helping first-time buyers save for their homes. In fact, our recent research found that 92% of Moneybox savers said the LISA was effective with 24% of those saying that the LISA would benefit from updates to reflect market conditions.”
“Yet despite its success, the Lifetime ISA’s property price cap has remained at £450,000 since its introduction in 2017. We believe this should be regularly reviewed in order to futureproof the product, giving current and future savers confidence that the LISA will remain fit for purpose by the time they come to buy their first home. We also propose introducing an emergency withdrawal allowance to prevent savers from being penalised in times of financial strain, allowing a portion of savings to be withdrawn without a penalty, or discouraging positive saving habits.”
Build and embed a culture of positive saving and investing habits
“For far too long, investing has been seen to be inaccessible and confusing, with many people admitting struggling to know how to even get started. If the last few years have taught us anything it's that as a society we need to take financial resilience more seriously and the truth is, financial resilience is mostly about enabling more people to build wealth throughout their lives.
“Concerningly, our research this year found that low levels of knowledge and confidence around money and finances could be putting two-thirds of UK adults at a financial disadvantage, to the sum of £65,000 over the course of their lives. Additionally, we know that more than 11 million working-age people in Britain currently don’t have “rainy day” savings of at least £1,000. If these individuals were better supported to make financial decisions with greater confidence, this could equate to a potential £2trn of spending power to the UK economy, and aligns with the Treasury’s objective to encourage a more financially resilient population, and economic growth.
“Financial advice also continues to be inaccessible to the vast majority, so it's clear that more needs to be done to guide and support people as they learn how to manage their finances and plan their finances for the future with greater confidence. We emphasise that any measures the Government introduces in the Budget should be done with the goal of building a positive saving and investing culture to futureproof the wealth creation of the country.”
Enable and encourage better retirement outcomes for millions across the country
“Connecting savers with lost pensions is one of the most powerful things we can do to improve the retirement health of the nation. Most people have no idea how much they will need to save for a comfortable retirement and are taking control of their retirement savings far too late in life, making it harder to save what they would need for their ideal retirement. With many rumoured measures potentially impacting people’s retirement outcomes, it's important the Government takes the right action to ensure pension-related policy changes are done so with the goal of increased retirement savings in mind.”
“With Moneybox now a key member of the Dashboard Operator’s Coalition for commercial pensions dashboards, we have a commitment to make progress and support the future retirement savings of the nation, but Government support will be required if we are to properly achieve this goal.”
“We urgently call on the government to make commercial dashboards available to consumers as soon as possible, so that consumers have access to the information they need from brands they already trust in order to take informed action. With the Pension Policy Institute estimating that an astonishing £31.1 billion is currently sitting in 3.3 million lost pension pots, the scale of the challenge is clear.”
