AWD Chase de Vere has accused the Government of being duplicitous in allowing one-way transfers of Isa cash into equity and other Isa vehicles from April 2008 but not allowing people to move back to cash Isas if circumstances dictate.
It is warning savers in cash Isas that moving all their cash into equity Isas could prove to be a disaster if markets are at their peak and their circumstances do not suit such a move.
The adviser suggests It says that some savers could have more than £45,000 in cash including that built up in Tessas, cash Isas and allowing for reasonable rate of return.
AWD Chase de Vere investments manager Anna Bowes says: “The danger of allowing the transfer out of cash is that people are far more likely to take advantage when stockmarkets are high, rather than when things have taken a tumble. Basically, even though this option has been introduced, we feel that for the majority of investors it would be a terrible idea to utilise it. If they feel they have built up too much cash over the years it would be wise to seek independent financial advice before they switch.”
The adviser argues that there really is no clear message in these rules. Bowe says “ On the one hand the Government appears to be being really generous by increasing the popular cash Isa allowance by 20 per cent. However by allowing people to switch out of their cash Isas into stocks and shares, but not back again smacks of a ploy to reduce overall cash holdings in Isas, as they have a vested interest in seeing this happen.”