Comment: Plans to streamline ISAs

Adam Thrower, Head of Savings at Shawbrook, comments: “Rumours circulating that the Government is planning to streamline ISAs has the potential to be a big boost to savers if done right. It would be great if the Government went further and increased the ISA allowance for all, including cash savers, not just those investing in British companies via stocks and shares.

Data from CACI showed that more than three million (3,300,000) more non-ISA savings accounts were liable for tax on savings in April 2023, a huge increase from just 257,000 a year earlier due to frozen personal tax thresholds.  Increasing the ISA allowance will allow more people to take advantage of higher savings rates while protecting the income it generates from tax.

Shawbrook saw a 73% increase in Cash ISAs being opened during the first five months of 2023 compared to the same period in the previous year, driven by savers’ quest for more tax-efficient means of preserving their money.  There was also a substantial uptick in funds deposited into Cash ISA accounts with a 55% rise from January to May 2023 when compared with last year.

Increasing the ISA allowance will benefit many, especially in the high interest rate environment we are in.”