Nationwide welcomes ISA limit expansion

Having called on the Chancellor to raise the ISA limit, Nationwide Building Society welcomes the announcement in today's Budget that savers will be able to deposit £10,200 - an increase of £3,000 - into their ISA this year. However, while the expansion of the allowance in this tax year is a positive move, the Society would like to see further improvement made that will help engage consumers about the importance of saving.

To make ISAs a sustainable and workable savings mechanism for all consumers, Nationwide believes the following changes would further enhance the savings scheme:

Ensure the ISA subscription rate is linked to the annual rate of inflation to ensure it maintains its true value.

Allow people to withdraw from and replenish their ISAs within a single tax year up to the maximum annual limit.

Increase the cash ISA limit to match that of the stocks and shares limit, giving consumers greater choice over how their savings are invested. The £5,100 limit for cash ISA holders is disappointing as it restricts consumer choice.

Create a single annual limit which, if not used in full, could be rolled over to subsequent tax years.

Lee Raybould, head of savings at Nationwide, says: "We're pleased that the Chancellor has acknowledged ISAs in his Budget and expanded this year's allowance to £10,000.

"Linking the ISA subscription limit to inflation 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."