Eight members of the Association of Accounting Technicians Working Group have called on the Government to simplify the Isa system through the creation of a new wrapper in a report published today.
MPs from the Conservative, Labour and Scottish National parties have joined experts from the savings industry and accounting profession to push the initiative forward.
The key proposal from the report called Time for change: a review of the Isa regime is that existing Isa products should be folded into a simple wrapper called the “Everything Isa”.
This would allow individuals to monitor their savings products within a single portal.
Other recommendations include establishing the “Everything Isa” at the same time as a baby’s birth is registered, ensuring future generations are encouraged to save.
Also it suggests providing a tick-box option when any savings account is opened, asking “Add this to your Isa?”, which should increase the awareness of saving in an Isa among adults.
Annual savings limits should be scrapped in favour of a £1m lifetime contributions allowance, the group argues.
AAT chief executive Mark Farrar explains Isas have become too complicated and the report shows how the system can be simplified.
He says: “We now have a system where there is an Isa for every day of the week, offering unnecessary complexity, bureaucracy and confusion.
“Isa simplification would make their availability and features more widely understood, and ultimately play a greater part in addressing the country’s terrible savings ratio.
“As such, this report offers a worthwhile, credible and thought-provoking alternative to the current muddied landscape, supporting AAT member calls for greater clarity and simplicity in the financial system.”
Conservative MP Graham Brady adds: “Isas have been a very effective tool for promoting saving and the financial independence that can bring. Simplifying the Isa regime and making it easier for people to save, at times in their life when they can afford to do so, would help more people to provide effectively for their future.”
Reacting to the report Old Mutual Wealth tax planning and expert Rachael Griffin says: “Navigating the world of Isas has become as complicated as working your way through a maze blindfolded.
“Last tax year, adults piled £62bn into Isas and £858m was heaped into Junior Isas. It is important that people don’t lose trust in the successful Isa brand which has been built on simplicity and now holds a substantial part of the UK’s savings.”