He said some reforms proposed by the Budget ? such as a simplified flat-rate pension ? could help encourage such habits.
Fortunately, the Budget also created saving and investment opportunities to help consumers achieve these goals and build short-term and long-term savings. The question now is whether cautious savers, or more gung-ho investors, should take advantage of some of these schemes.
INDEX-LINKED SAVINGS CERTIFICATES
Although it wasn't mentioned in the Budget speech, many savers will be cheered by National Savings & Investments relaunching its popular Index-Linked certificates this year. These products were hugely popular with investors last year, as inflation started to creep up again, but were withdrawn last summer.
These five or three-year savings plans guarantee to pay a rate at least equal to inflation, as measured by the retail price index ? so savers know they can get risk-free real returns on their money. (NS & I is backed by the Government, so people know that, provided the country does not go bankrupt, their money is safe.)
Given that George Osborne said in his Budget that inflation is likely to remain at its current level for the rest of the year, and could indeed still increase slightly e_SEnD this announcement will provide relief for many savers, particularly pensioners who can't afford to risk their capital and often use the interest they receive on savings to supplement a pension.
According to Moneyfacts, the financial data provider, there are just eight savings accounts that allow savers to get a better return than the consumer price index, the Government's preferred measure of inflation, currently running at 4.4pc. But these accounts are all Isas, so the amounts that can be saved each year are limited (�5,100) and all require customers to lock money away for at least four years.
NS & I hasn't given a date when savings certificates will be available again. Demand is likely to be high and they could sell out quickly.
ISA AND PENSION INVESTMENTS
Mr Osborne said the main aim of this Budget was to kick-start the economy and help the private sector grow. One of the main tools for doing this was an unexpected cut to corporation tax, which will fall from 28pc to 26pc in April. He said that over the long term this will be reduced to just 23pc ? giving Britain one of the lowest rates of corporation tax.
But this isn't just good news for British businesses looking to cut costs and boost profits. It could also help many investors, who own a small slice of these corporations through pensions and Isas.
Ben Yearsley, an investment manager of Hargreaves Lansdown, said: "This announcement has got to be good news for companies and great news for UK investors."
He said it should help boost dividend payments as these are paid out of after-tax profits. A cut in this tax should mean there is more money to pay dividends, he said, which is good news for the thousands of investors who buy popular equity income funds. (This assumes that companies pass on the spoils of this tax cut with their shareholders.)
He added: "Whether you're investing in big blue chips or smaller companies, this Budget is good news for investors who buy British."
SOPHISTICATED INVESTORS
Mr Osborne announced a significant overhaul to the enterprise investment scheme. People investing in this scheme ? which plugs money directly into start-up business ? will be able to claim 30pc tax relief on contributions up to �1m.
Previously only 20pc tax relief was available on investments of �500,000. Given that these schemes also allow people to defer capital gains, and after two years any investment is free of IHT, it isn't hard to see the attraction for wealthier investors.
The downside is that these can be highly illiquid investments ? with no guarantee of when you can withdraw your money.
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