Invesco Perpetual: ISA reforms

Following on from the announcement by the Treasury to lay regulations to implement the new ISA reforms, Rick White, Marketing Director at Invesco Perpetual, one of the UK’s largest PEP and ISA providers, comments: “As we said around the time of the budget when these reforms were announced by the then Chancellor Gordon Brown, whilst any increase to ISA limits is a step in the right direction, the rise to £7,200 by April 2008 to the equity ISA portion – an extra £16.66 a month – risks disappointing many investors. While the cash ISA limit rising by 20 per cent to £3,600 will be welcomed by the millions of people saving in cash ISAs, the 2.8 per cent rise for equity ISAs is less encouraging. Indeed, applying a 20 per cent rise in equity ISA limits would see an increase to £8,400 - £1,400 more than is permitted today.

“ISAs are crucial to maintaining some sort of long-term savings culture in the UK. They provide 17 million people with a genuine and much needed incentive to save and are vital considering savings overall are in decline. The equity ISA subscription levels have not changed since inception in 1999 and during that time we have seen savers become increasingly geared towards cash savings, offering them lower returns over the long-term. To make equity ISAs more attractive we had hoped that the Government would upgrade the limits, not only by a mere £200 but at least in line with inflation.”