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4 Jul 2020

News

Government promises commitment to ISAs but could more be done?

Earlier this year HMRC reported that ISA contributions had reached an all time high, with Britons subscribing to over 16 million ISA accounts. So with this in mind, it is welcome that the Government proposes to continue ISA savings schemes. Rachel Thrussell, Head of Savings at moneyfacts.co.uk comments:

“As the UK’s indebtedness becomes an increasing problem, the Government must continue to promote the benefits of saving, the importance of long term planning and saving for retirement, if they stand any hope of converting a nation of borrowers to a nation of savers.”

The key proposals include an open-ended commitment to provide ISAs, with a maximum investment of at least £7K per annum. Additionally, they aim to simplify the ISA account system, abolishing the mini/maxi distinction and giving the option to allow child trust funds to convert to an ISA on maturity.

Rachel continues: “ While it is welcome news that ISAs are here to stay, there is still perhaps more the Government needs to do, or could do to create the savings culture it desires. We would like to see the maximum limit increased, particularly the cash component, which will be more widely used by the main audience the Government is aiming for. The limit will also become outdated over time. With the real value falling every year, perhaps the limit could be index linked. 

“Let’s hope the simplification process will not only bring transparency to the market and take away confusion and stigma that ISAs are complicated and perhaps only for the wealthy. If providers can also benefit from simplification, by way of cost savings, perhaps consumers will also benefit from better interest rates.”

For the latest Moneyfacts Best Buy Cash ISA rates, visit www.moneyfacts.co.uk / www.moneyfacts.co.uk/savings/bestbuys/savings_mini_cash_isa.aspx

 

NOTES TO EDITORS:

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry. 

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