Helping Families Secure Their Futures

02/02/2010

STEP has published its UK election year manifesto, “Helping Families Secure Their Future -an agenda for policymakers"

The next few months in the UK are clearly going to be closely fought politically. Whatever the political claim and counterclaim, the reality is that the financial crisis means that whoever wins the approaching election will need both to repair the public finances and ensure that families are well placed to support themselves as much as possible through what could remain difficult times in the broader economy.

Helping families from every walk of life secure their financial future, in both good times and bad, is what STEP members do. We have therefore drawn together our memberships’ practical knowledge of the real problems confronting many families, often at times of great personal difficulty, emotional challenge and complexity, to draw up an agenda for policymakers – of whatever political persuasion - over the lifetime of the next Parliament.

Our policy agenda focuses on four main areas:

• Delivering dignity for the vulnerable – a series of proposals aimed at making it easier for families to help protect loved ones who through age or illness are incapable of looking after their own affairs. Our recommendations here include making it a regulatory requirement in areas such as financial and public services that staff are given basic training in how powers of attorney – a basic tool in protecting the financial affairs of the vulnerable – work. This would sit alongside the training such firms are already required to provide in areas such as money laundering.

• Modernising our inheritance laws and institutions – our inheritance laws and institutions have failed to keep pace with the rapid changes in society. For example, with the average value of estates rising sharply growing numbers of wills are being contested, often due to poor initial drafting, at great monetary and emotional cost to families. Currently anyone can set up in business as a will writer and to protect the public and guarantee minimum standards we believe will writing should be regulated.

• Creating the capital to support the elderly and vulnerable – The current pension and savings market is dysfunctional. In spite of huge tax subsidies, half of UK adults are saving nothing for their pension and around a third have no savings at all. It is time to think afresh, breaking down the barriers between ‘savings’, ‘pensions’ and ‘assets’. We should focus on encouraging ‘capital accumulation’ and making it easier for families to use all their capital resources to support themselves in times of need. Among other proposals, we have put forward radical plans to help families make better use of the two thirds of their wealth typically held in non-financial assets using a new approach we have called ‘Lifetime Trusts’.

• Building a better tax system – The UK is increasingly at a competitive disadvantage because of complex and uncertain tax laws. We have put forward a range of proposals to tackle this uncertainty and ensure better tax laws. We are, for example, calling for an independent review to establish a clear distinction between ‘acceptable” and ‘unacceptable” tax planning.