As ISA season begins to gear up, Nationwide Building Society is again calling on the Government to raise the current cash ISA limit in line with the stocks and shares ISA limit in the Budget on 20 March 2013.
Equalising the ISA limits would enable savers to put a maximum of £11,280 into a cash ISA, the same as the existing equity ISA limit and double the current cash ISA limit of £5,640.
Nationwide says that not only will equalising the cash and equity ISA limits remove confusion amongst the public and help to simplify ISAs, increasing the cash limit will bring benefits to specific groups of savers:
- A higher cash ISA limit would enable first time homebuyers to save more in a tax-free cash account towards a deposit
- Pensioners and those approaching retirement may prefer to move more of their savings in to cash rather than equity ISAs to protect the value of their capital and give them the certainty of a consistent return
- Equalising limits would give them greater flexibility in managing their investments
- Raising the cash ISA limit would enable people to save more in cash tax-free, offsetting at least some of the pressures created by the current economic climate
Simplifying limits will make ISAs easier and fairer for everyone to understand and could encourage more people to make the most of their tax-free savings allowance regardless of if they are saving in cash or equity.
Currently £390 billion is invested in ISAs in the UK, but Nationwide says that still less than half of those eligible for an ISA in the UK currently have one. As the country’s second biggest provider of savings accounts, the Society is once again urging the Chancellor to equalise the limits in the upcoming Budget to highlight the importance of tax-free ISAs to savers.
Richard Marriott, Head of Savings at Nationwide said: “With many first time buyers struggling to raise a deposit and with pensioners relying more on their savings income we believe this is the right time for the Government to act on ISAs.
“Increasing the cash ISA limit and equalising it with the equity ISA limit would simplify and bring about increased fairness to the entire ISA regime in a single stroke. Not only would it bring a much needed boost to groups such as first time buyers and pensioners, it would also send out the right message to all of Britain’s savers, that it is worth saving, no matter how much or how little, in cash or in equity.”
Notes to editors:
Nationwide is the world's largest building society as well as the second largest savings provider 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 customers.
Customers can manage their finances in a 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.