Rumours have been doing the rounds that the Inland Revenue will dump Mini Insurance ISAs very shortly.
The news is that instead of having a separate £1,000 ISA allowance that can be invested into insurance policies, the £1,000 will shortly be included within a Maxi ISA. This technically means that if investors do not want to put their money into investments like unit trusts, OEICs and investment trusts, they can use with profits policies as well.
Any changes that take place don't look likely until the 2005 tax year.
Our View
According to Government statistics, around £0.5 billion is already invested within the insurance component of ISAs. We are slightly concerned about what will happen to the people already invested? Will they be worse off?
By reducing the complexity of ISAs, they may become more appealing to consumers. Getting rid of the insurance ISA component will leave a Mini Cash ISA, a Mini Stocks and Shares ISA and a Maxi ISA.
Learn more about ISAs in the Savings Adviser.com.