Nationwide calls for ISA review in Budget
Nationwide Building Society has called on the government to review its approach to tax-free savings accounts in today’s Budget report.
The UK’s biggest building society said Chancellor Alistair Darling should seek to foster a savings habit among Brits in his Budget proposals later today by making individual savings accounts (ISAs) more flexible and easier to use.
“We would like to see changes implemented that make it easier and more worthwhile for consumers to make full use of their tax-free savings allowance,” said Graham Beale, Nationwide’s chief executive.
The building society believes that changes to make ISAs user friendly would encourage more people to save.
Changes proposed by Nationwide include increasing the ISA subscription limit from £7,200 to £8,735 to reflect the effects of inflation since ISAs were launched in 1999, and allowing people to withdraw from their ISAs without losing the tax free benefits on the money withdrawn.
“Increasing the ISA subscription limit to counter the effect of inflation over the past ten years would provide an added incentive for consumers to save, while increasing the flexibility of ISAs would offer greater support to those consumers who need to dip into their savings or those who are currently struggling to save their full allowance,” Beale said.
Recent research by Nationwide found that 70% of Brits are failing to make use of their full ISA allowance.