NATIONWIDE ASKS THE CHANCELLOR TO MAKE A DIFFERENCE FOR SAVERS AND FIRST TIME BUYERS

20 March 2006

Only one in ten expects the Budget to have a positive impact on their family finances

Nationwide Building Society has called on the Government to use the forthcoming Budget to encourage saving and help first time buyers – following research which shows that expectations that the Budget will help family finances are very low.

Recent research1 conducted by Nationwide shows that consumers have little confidence that the Budget will have a positive impact.  When asked what impact they believe the 2006 Budget will have on their family finances:
- just 11% believe it will have a positive impact
- 36% believe it will have a negative impact, and 39% expect it will have no impact at all.

Homeowners are the most pessimistic, with 41% of those buying a home with a mortgage expecting that the Budget will have a negative impact on them. 

Philip Williamson, Nationwide’s chief executive, said:  “Consumers are not expecting to hear much in the way of good news from the Chancellor in this year’s Budget report.   Homeowners in particular expect the Budget to bring nothing but bad news.  However, we are calling on the Chancellor to surprise us all with some targeted announcements to support savers and first time buyers.”

Nationwide has called on the Government to prioritise help for first time buyers and to encourage savings, by focusing on stamp duty, Child Trust Funds and ISAs.  The Society is calling on the Chancellor to:

• introduce a stamp duty escalator so that in future the tax threshold keeps pace with rising house prices.  Had it been linked to house price inflation since 1993 the threshold would now be £190,000
• introduce a graduated stamp duty system to avoid ‘bunching’ of property prices around the current stamp duty thresholds
• announce details of further top-ups for Child Trust Fund
• equalise tax treatment for the 10 million children too old to qualify for the Child Trust Fund
• increase the ISA limits, which have remained unchanged since 1999, to £9,000 for a maxi ISA and £4,000 for a mini cash ISA.

“We believe this range of measures would make a real difference to families and their finances,” said Philip Williamson.