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BSA calls for increase in cash ISA limits

BSA calls for increase in cash ISA limits

Category: Savings

Updated: 06/03/2012
First Published: 06/03/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Building Societies Association (BSA) has called for the savings market to be given a boost by increasing the amount of money people can invest in cash ISAs.

It comes on the back of the third anniversary of the Bank of England base rate being reduced to 0.5%, which, coupled with high interest rates, has hit savers in the pocket.

The BSA says that with interest rates being so low, building societies and other providers have little room for manoeuvre when it comes to savings rates.

As a result, it is calling on Chancellor George Osborne to provide savers with some much needed relief by allowing people to save their entire £10,680 ISA limit into cash accounts.

At the moment, savers can deposit all of their ISA limits into a stocks and shares ISA, but only half can be put into a cash account.

The body said that the current rules that only allow £5,340 to be saved into cash products are 'illogical' as it gives those nervous about stocks and shares access to only half of their allowance.

Similarly, the BSA wants to see transfers permitted from stocks and shares ISAs to cash ISAs, bringing the rules in line with Junior ISAs.

It would also allow savers worried about the volatile stock market to transfer their stocks and shares savings into cash.

"We're calling today for the Chancellor to make small changes via the Budget that will give some assistance to millions of savers in the UK ," said Adrian Coles, director-general of the BSA.

"Whilst the lower for longer bank rate environment has been a boon to existing mortgage borrowers, it has effectively delivered a kick in the teeth to savers.

"Plus it has reduced the flow of mortgage funds for new borrowers and been a business challenge too."

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