The building society has called on the chancellor to introduce equal limits on cash and equity individual savings accounts (ISAs), index-link individual savings account limits to inflation to ensure they keep their true value and allow equity individual savings account holders to switch all or part of their individual savings accounts into cash.
Higher limits for annual investment in ISAs will be introduced on April 6, 2008. The change will allow people to save up to GBP3,600 in a cash ISA and up to GBP7,200 in a stocks and shares ISA, within an overall annual savings limit of GBP7,200 – up from GBP7,000. While Nationwide welcomes an increase in limits, it does not believe that these changes go far enough to help encourage a more robust savings culture in the UK.
Matthew Carter, Nationwide’s director of savings, said: ISA limits simply aren’t as generous as they once were. Nationwide believes that it is time to redress the balance and restore the limits to their true value and therefore maximize their potential. The government also has the opportunity to simplify ISAs by equalizing the cash and equity limits. The government has removed some of the difficulties associated with the ISA system, however, we feel that more can still be done to encourage savers to make full use of their ISA allowances.
