The British Bankers Association (BBA) has called for George Osborne to help savers by changing how the annual Individual Savings Accounts (ISA) allowance works.
Investors can put up to £11,520 into an ISA in the 2013/14 tax year. However, only £5,760 can be held in a Cash ISA, leading to claims that savers, who prefer to hold cash, are losing out to investors, who are prepared to take greater risks with their investments.
In its’ submission to the Treasury ahead of next month’s Autumn Statement, the BBA has called for the rules to be changed to allow up to 100% of the £11,520 allowance to be held in cash; levelling the playing field between investors and savers.
Cash ISA transfer rules
The BBA also wants to change the ISA transfer rules.
At present Cash ISAs can be transferred to a Stocks & Shares ISA but not vice versa. The BBA would like this rule changed, which would allow investors to reduce the risk they are taking, perhaps as they near retirement or come close to achieving their savings goal.