Scrapping British ISA may forfeit £14.7bn of investment
The British ISA could generate almost £14.7bn in investment if just a quarter of UK ISA investors utilise it, new research suggests.
The analysis was carried out by peer-to-peer property lending platform easyMoney, which estimates there are 11.752 million ISA investors in the UK.
The tax wrapper was announced by former Chancellor Jeremy Hunt in last year’s Spring Budget and would have allowed for an additional £5,000 tax-free allowance for savers to invest in UK stocks on top of the current ISA threshold of £20,000.
But new UK Chancellor Rachel Reeves is rumoured to be planning to scrap the tax wrapper before it even launches.
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However, analysis by easyMoney has also shown that awareness of the new ISA is relatively low.
The survey of the UK public found that 37 per cent have either already invested, or plan to invest in an ISA before the financial year expires.
Of this 37 per cent, 17 per cent plan to, or already have, maximised the current tax-free threshold of £20,000.
However, just 16 per cent were even aware of the British ISA and of this 16 per cent, just 29 per cent stated that they had planned to invest into it when it did become available.
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“We’re strongly in favour of the diversification of the investment landscape,” said easyMoney chief executive Jason Ferrando. “Particularly where ISAs are concerned, as they provide an accessible, tax-free option for the everyday investor, without the risks associated with other investment assets.
“So in this sense, it’s certainly a shame that the British ISA is set to be scrapped before it’s even seen daylight, as it would have not only provided an additional avenue of investment for the UK public, but it would have also brought a potentially sizable contribution to the UK economy.
Despite this, it seems unlikely that it will be missed, as very few were even aware of it and even fewer intended to utilise it.”
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