Tax-free savings 'should be extended'

There should be more tax breaks attached to saving accounts, it has been claimed.

Indeed, the country should follow the example of others – such as the United Kingdom – in providing tax-free saving allowances across a whole range of savings and investments products, founder of actuarial consultants RiceWarner Michael Rice claims.

At present, however, tax-effective savings are only offered for money placed into superannuations, the Australian reports.

Indeed, extending tax-free incentives could help people to make more of high interest savings accounts.

"Leave it in a bank account, for example and you pay tax on the interest at your marginal rate. This is harsh compared to other countries, which encourage all forms of savings," Mr Rice points out.

The provision of further tax-free savings could be of particular assistance as a recent study carried out by Dun and Bradsheet revealed that four out of ten people claimed they would be unable to survive on the money in their savings account for any longer than a month should they lose their jobs.

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