With the launch of the new ISA taking place in less than 3 months, the Inland Revenue has set aside £1.2m to fund a publicity campaign to raise awareness and increase the chances of success for this new investment vehicle.
As part of this campaign, the Revenue plans to produce a leaflet which provides details of the ISA and how it can be used.
The Government is aiming to encourage savings amongst the lower income sectors of society where the tendency and of course the ability to save is very low.
However it appears that the Government still has some difficulties to overcome. The first is the lack of awareness, which is now being addressed. But more importantly, many of the households do not pay tax and will not benefit from a tax free savings account. It also appears that there will be less providers of ISAs than Peps and Tessas as some institutions are not interested in the new scheme.
These latest facts confirm what many have been saying for some time, namely that the habit shift necessary to achieve the laudable objective of increasing saving is not one that can be solved by tax incentives alone.
Even on the publicity front, there is some danger of confusion for the potential saver, in the simultaneous marketing of the ICI and of stockholder pensions.