Investment specialist in ISA plea to new Chancellor
The boss of Manchester investment platform AJ Bell has written to Chancellor Sajiv Javid calling on him to simplify the rules around Individual Savings Accounts (ISAs) to help close the savings gap in the UK.
The firm, which floated on the stock exchange last year in a move that initially valued the business at £500m, says ISAs have become unnecessarily complicated which has created a barrier to people saving more.
The platform provider is also launching a policy paper (ISA Simplification – One ISA) written by its technical director, Peter Hopkins, who previously led the pension simplification project at HMRC.
The policy paper outlines AJ Bell’s ‘One ISA’ vision and how the existing versions can be consolidated into a single product in a way that is cost neutral to the Government.
Chief executive Andy Bell said: “I set up AJ Bell, one of the UK’s largest investment platforms, 24 years ago and today we administer over £50bn of savings for both advised and non-advised customers in the UK.
“During that time, I’ve learnt that one of the main issues preventing people saving more and hence a key contributor to the savings gap in the UK, is complexity.
“As the newly-appointed Chancellor I believe you have an opportunity to radically simplify the rules around Individual Savings Accounts which, along with pensions, are the main vehicle people in the UK use to save for their futures.”
In the letter Mr Bell says: “ISAs started life as a very simple, tax efficient savings product.
“Over the years, various changes and additions to the product have made them unnecessarily complicated, with at least six variations in existence depending on how you look at it.
“People now have to choose which ISA suits their specific needs and often they can’t decide, which leads to them doing nothing and not saving.”
He said: “We believe a much simpler system, based around a single ISA product, would mean that the only decision people need to make is to open an ISA and start saving.
“A single ISA can still cater for all the outcomes of the existing versions but without requiring the customer to make the decision when opening an account.”
Mr Bell added: “Peter and I would be very happy to meet with you and your team to discuss this vision in more detail and how it could be implemented, with the ultimate aim of helping consumers to save and closing the savings gap in the UK.”
