Call to increase share scheme limit

The Government has been urged to increase the amount people who can save through employee share schemes.

Ifs ProShare has written to Chancellor Alistair Darling urging him to increase the maximum amount people can set aside through Save-As-You-Earn (SAYE) schemes from the current level of £250 a month to at least £400 a month.

The group, which promotes employee share ownership, said the current savings limit had been in place since 1991, and would now be more than £400 if it had been increased in line with inflation.

SAYE schemes enable people working for certain companies to save between £5 and £250 a month for a set period of time, usually three or five years, at the end of which they receive a tax-free bonus or the option to buy shares in their company at a discount.

There are currently 2.3 million employees saving through one of the schemes, with recent research carried out by ifs ProShare suggesting 20% of workers invest the maximum amount each month.

Phil Hall, head of public affairs at ifs ProShare, said: "The Government has rightly talked of the importance of encouraging people to save more, particularly in the current economic climate.

"By increasing the amount of money employees can save in a SAYE plan, the Government can provide a tangible example of action taken to match such rhetoric.

"We very much hope that policymakers will recognise that continued failure to increase the £250 limit to at least £400 means that the amount of money employees can save is being eroded on an annual basis. It's been more than 17 years since the limit was last increased, so clearly a change is overdue."

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