The largest building society in the UK has urged the Government to double the limit on cash ISAs to £10,680 in order to help the nation’s savers.
Nationwide’s recommendations comes on the heels of a new report claiming that middle-income families have had to plunder their savings accounts to the tune of £2,000 on average over the past three months due to rising costs of living. The personal and business bank account provider wants the £5,340 cash ISA limit doubled in order to match the £10,680 limit placed on investment ISAs in order to reward and encourage savers with increased returns on their tax free deposits.
The building society’s suggestions coincided with a new report from ING Direct that found the average family of middle income earners, who make approximately £47,000 annually, had experienced a decline in their savings pots by nearly £2,000 in the past ninety days. Nationwide chief executive, Graham Beale, said that increasing the ISA limit would be of particular use to the depressed housing market, as first time home purchasers demonstrate a higher likelihood of investing in cash, as the risks inherent in short-term investments are much higher.
Mr Beale remarked that Nationwide would prefer savers be given more aid through increased ISA limits, alongside the increased flexibility to transfer their deposits between equity and cash ISA products by eliminating the current market restrictions. In the 2011-2012 tax year, savers can deposit as much as £10,680 in stocks and shares ISAs or up to £5,340 into a cash ISA, with an option to split their deposits between both options, yet are still bound by the cash ISA cap of £5,340.