Chancellor misses an opportunity to help savers

21 March 2012

Nationwide is disappointed that Chancellor George Osborne did not announce an increase in the cash ISA limit in the Budget. The Society had written to the Chancellor calling for an increase to the cash ISA limits, from the start of the new tax year, from £5,640 to £11,280 - equivalent to the equity ISA maximum.

Many savers prefer the security of cash savings, but the current ISA restrictions mean they are limited on how much they can save tax-free.

One group of people that would be helped by an increase in the cash ISA limit is first-time buyers, many of whom are struggling to find the deposit necessary to secure a mortgage. An increase in the cash ISA limit to £11,280 would have helped first-time buyers save the required deposit faster.

Graham Beale, chief executive of Nationwide, said: "The Chancellor has missed a real opportunity to help savers and first-time buyers.

"The current rules mean savers who prefer the security of cash savings can only save half as much in a tax-free account than equity ISA investors.

"One of the biggest hurdles for people to own their own home is raising the deposit.

"Savers can pay as much as 40 per cent tax on the interest they receive on their money. The chance to save more in a tax-free account would mean they could really boost the amount they have saved.

"I believe the Chancellor should look again at the ISA rules and do more to help those who want to save in a cash ISA."

Notes to editors:

About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest savings providers and a top-three provider of mortgages in the UK. It is also a major provider of current accounts, credit cards, ISAs and personal loans. Nationwide has around 15 million members.

Since the credit crunch began in 2007, Nationwide has remained profitable against a very difficult economic environment. In the half year ending September 2011 Nationwide made a strong underlying profit of £172 million – up 17% from the previous year. Its strong financial performance and prudent business model means that Nationwide is included in Global Finance magazine's Top 50 Safest Banks in the World.

Nationwide has around 700 branches and customers can manage their finances in branch, on the telephone, internet and post. The Society has around 16,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.

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