6 March 2024
If you are covering the announcement of the British ISA at the Budget, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
"The government has gone ahead with opening a consultation into the creation of a British ISA, despite receiving criticism before the budget. While the measure is touted as a boon for invigorating the UK stock market by encouraging investment in domestic equities, the introduction of this new ISA allowance raises significant implementation challenges and serves to further complicate the once-simple ISA brand.
"The ISA is a simple idea, a tax efficient place to grow your wealth, however, with various additions over the years it has now become a confusing area of personal finance. Faced with the complexities of this consumers tend to just opt for what they know and that almost always is just a cash ISA.
"So few people use their total ISA allowance in a given tax year too so the allure of £5,000 more is only appealing to much higher net worth people. The reality is we need to better incentivise the millions languishing in cash ISA accounts to be put to work in the stock market.
"Moreover, the effectiveness of this initiative is contingent upon its uptake by the public and the response from UK companies. There is a palpable risk that the ISA may not attract the intended level of investment, or only primarily benefit wealthier individuals.
"While the British Isa is presented as a strategic move to bolster the UK stock market and economy, it is fraught with potential pitfalls and may not address the root causes of the challenges facing the UK's financial sector. The measure is likely a politically motivated stunt ahead of upcoming elections, rather than a well-considered strategy aimed at sustainable economic growth."
For more information, please contact Alex Berry on + 44 (0)7741151931
