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Revenue quashes hopes of revised £50,000 ISA limit

Confusion is reigning over the exact shape of the Individual Savings Account, with wildly conflicting signals over what is up for consultation.

Product providers and trade associations were last week given hope that the controversial £50,000 lifetime savings cap would be reviewed.

In meetings with Government officials, representatives of the trade bodies were led to believe that the limit was being reassessed.

Investment and Life Assurance Group director Nicola Hayes says: "I am more optimistic now than I was this time last week. There are some very positive things in the ISA. It is not great but it is better than it could have been."

But the Treasury has acted swiftly to dampen speculation by strongly denying that there are any plans to change the lifetime contributions limit.

A Treasury spokesman says: "Number 10 has dismissed these reports as nonsense. The proposals in the consultation document are based on the £50,000 limit."

An Inland Revenue spokeswoman also denies that the limit is being reviewed. She says: "There are no plans to change the £50,000 limit.

"It is a consultation period but the Government thinks that the limit is right for spreading limited resources more fairly."

Further confusion over how the ISA will work has erupted over the details for transferring Pep money into an ISA.

The Revenue spokeswoman says investors with Peps managed by several providers will be forced to transfer the money to one ISA manager.

Life offices fear this could lead to investors being hit with huge transfer costs.


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