ISA reforms encourage saving

Four in 10 people who are aware of the ISA changes say they will help them to save more, research by Which? has found.

From 1 July 2014, ISAs were reformed into the New ISA with a £15,000 annual limit for cash and stocks and shares.

The survey of over 2,000 people revealed that 54% say the new rules will encourage them to shop around for the best ISA deals. The research found that many ISA-holders had never switched their accounts before the reforms. More than half (55%) of those with instant-access cash ISAs and 42% of people with notice cash ISAs had never searched for a better deal before.

Separate research found that:

  • half of people admit they could save more
  • 12% of people plan to save more in the next year
  • 36% of people still haven’t heard about the new ISA rules.

Which? is calling on providers to stop limiting transfers into new savings accounts. Earlier in the year the consumer group revealed that 72% of instant-access cash ISAs allowed transfers in, dropping from 88% in 2012.

Chancellor George Osborne said:

“We want to support savers at all stages of their life and make sure they have greater flexibility and choice over how they access their savings. Today’s introduction of the new ISAs is a big boost for millions of people, giving them greater economic security by putting aside money in savings.”

Richard Lloyd, executive director of Which?, said:

“The Government’s reforms are good news for existing savers and they will also encourage more people to save, but the benefits will be undermined if providers don’t help savers get the best rates. It’s now over to the banks to help their customers make the most of their money. Providers should clearly notify their customers of their interest rates and the changes, make switching easier, and stop limiting transfers in.”

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