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Plea to double the cash ISA allowance

Plea to double the cash ISA allowance

Category: ISAs

Updated: 28/11/2013
First Published: 28/11/2013

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 It is now over 6 months old so the content may be out of date.

Several financial bodies have come forward in recent weeks to urge the Government to boost the current cash ISA allowance to encourage more saving, with the pleas coming ahead of 2013's Autumn Statement due to be delivered next week.

The British Bankers' Association (BBA) is one such organisation. They're calling for savers to be allowed to hold all of the current £11,520 annual ISA allowance in a cash ISA rather than needing to split the amount between cash and stocks and shares, arguing that cash ISAs pose much less investment risk and a higher limit would therefore encourage more saving.

In a similar move, the chief executives of Prudential and Alliance Trust have urged Chancellor George Osborne to double the current ISA allowance to help boost business investment and re-balance the recovery.

Tidjane Thiam and Katherine Garrett-Cox argue that one of the pre-requisites of business investment is household saving, something which isn't yet a core part of our culture. But, they say, good-value savings products and clear Government incentives to save could boost the savings habit, and as ISAs are "the savings vehicle of choice" for UK households it's this sector that should be focused on.

They're calling on Mr Osborne to raise the ISA allowance to at least £20,000, which would ideally leave us with a culture of "save, save, save" – which would, in turn, boost business investment.

The Statement is due to be delivered on 5 December when we'll see if these ideas get taken on board, but in the meantime, why not make the most of your current tax-free allowance by seeing what rates are available?

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