The new economic secretary to the Treasury, Kitty Ussher has laid the foundations for a revamp of individual savings accounts. The new proposals are aimed at helping to make individual savings accounts more attractive. The proposals include making them more flexible, allowing people to save more. It also includes the removal of maxi and mini distinction.
You will be allowed to save £7,200 a year with effect from April 2008, although this will have to be split between £3,600 cash with one provider and the balance in stocks and shares with either the same or another provider.
Our view
Whilst most commentators believe these changes will encourage people to open an individual savings account, we believe they are totally irrelevant and falls well short of encouraging active participation for all. £200 extra overall, less than inflation over the last few years and more into ‘cash’ ………. big deal.