Simon Harrington, Head of Public Affairs at PIMFA, said:
“We welcome Chancellor John Healey’s decision to reverse his predecessor’s controversial plans to slash the annual Cash ISA allowance from £20,000 to £12,000. We have consistently argued that cutting the allowance was unlikely to achieve the Government’s ambition of encouraging more people to invest, and risked making the Stocks and Shares ISA – the very wrapper it wants people to use – less attractive.
“Our research found that just 7% of PIMFA member firms believed cutting the Cash ISA allowance would encourage savers to become investors underlining our concern that restricting consumer choice is the wrong approach to building a stronger investment culture in the UK.
“Turning a nation of savers into a nation of investors is a worthwhile ambition, and one we fully support – the UK has £430bn sitting in cash deposits and lags behind other G7 countries in terms of direct exposure to equities. We support many of the initiatives which have been introduced to address this and transform a nation of savers into a nation of investors.
“However, this is best achieved by raising awareness of the long-term benefits of investing and making it easier for people to access suitable investment opportunities, rather than through direct product intervention accompanied draconian anti-avoidance measures that introduce unnecessary complexity into the ISA regime.
“Investors value stability, simplicity and choice. Maintaining the existing ISA regime is the right decision for consumers and provides a more stable foundation from which to encourage greater participation in the investment market.”