The British Bankers’ Association has warned the Treasury against any cap on the total amopunt held in Isas, claiming it would undermine the Isa brand and stability of savings.
Over the summer the Government floated the idea of a £100,000 Isa cap to stop tax incentives for “Isa millionaires”.
But in its submission to the Autumn Statement, being delivered on December 5, the BBA warns the Isa regime is popular and should not be tinkered with.
It states: “Any plans to limit the amount that savers can hold in these tax-free accounts risks damaging the Isa brand which has been carefully nurtured as a key part of the UK’s long term savings planning since Isas were introduced in 1999.
“A new Isa ‘savings cap’ would raise doubts on the stability of the regime going forward and discourage saving, as there would be a perception that the cap would be reduced over time following the experience of the pensions regime.”
Instead the BBA joins the Building Societies Association in calling for the Isa cash allowance to be doubled to £11,520 to match the amount held by stocks and shares.
It also supports the ability to transfer holdings in stocks and shares Isas into cash Isas to help savers running down their assets and manage investment risk as they approach retirement.
The BBA also warns the Government to come up with an exit strategy for the Help to Buy scheme and to stop a housing bubble by building more homes.
In addition it wants an increase to the current £150,000 maximum level for seed Enterprise Investment Schemes and for the capital gains tax exemptions under EIS/SEIS to be extended for a longer period.
In a wide-ranging submission it also warns against competitive disadvantages from a higher bank levy and the EU bankers’ bonus cap.
It also wants financial education to be taught in primary schools after it was put on the secondary school curriculum from September 2014.