13 March 2012
Ahead of the Budget, Nationwide is calling on the Chancellor, George Osborne to increase the current cash ISA limit from £5,340 to £10,680, equivalent to the current equity ISA maximum.
The Society regularly receives feedback from its 15 million members. Savers are concerned at the erosion of their income as inflation continues to outpace the returns they are earning on their deposits.
At the same time, first time buyers struggle to save the necessary deposit to secure a mortgage. Most first-time buyers now need to put down a 20% deposit which is approximately twice the average needed in 2007. By increasing the cash ISA limit to £10,680, there would be the opportunity for first-time buyers to build larger deposits in a tax-free vehicle.
Graham Beale, chief executive of Nationwide said: “The Chancellor has a real opportunity to help borrowers and savers alike in the Budget later this month.
“Many savers prefer the security of cash savings, but the current ISA restrictions are limiting the amount they can save tax free.
“I believe that if the cash ISA limit is increased to £10,680 from its current limit of £5,340 it will not only help savers address the inflationary pressures, but also help borrowers struggling to raise a deposit.”