TISA calls for Saving Gateway to mature into ISA

TISA is calling on Government to make a cash ISA the default option for funds in Saving Gateway accounts upon reaching maturity.

The Government consultation on the national roll out of the Saving Gateway closes this week. TISA applauds the Government's efforts to implement the new kind of savings scheme which is targeted at low and moderate earners, who are often least able to save.

Current Treasury proposals recommend that the amount held in the account be defaulted into a taxed savings account of the providers' choosing. In its response to the consultation, TISA champions cash ISAs as the best outcome for consumers in order to boost their savings.

To keep the new system as clear and simple as possible, TISA believes that the amount rolled over from the Saving Gateway account should not count towards the annual ISA subscription limit but be treated by the receiving ISA provider as a transfer from a ‘previous year' ISA.

TISA Director-General, Tony Vine-Lott said: "We are delighted to continue our strong dialogue with the HMT and HMRC in responding to the consultation on the Saving Gateway. We feel that the key to the success of the scheme will be in its simplicity and, wherever possible, its similarities with other successful government-incentivised schemes like the Child Trust Fund (CTF) and Individual Savings Account (ISA). We believe that defaulting into an ISA upon maturity will the scheme clear, simple and easy to understand from the point of view of the saver while at the same time being the most cost-efficient process for the provider."