The Treasury has consulted with financial services firms over the impact of imposing a £100,000 cap on the amount savers can hold in Isas and is said to be looking at reducing the amount of pension tax-free cash.
The Sunday Telegraph reports that officials have explored the impact of a cap on Isas, with one suggested cap being as low as £100,000, in order to address concerns about the growing number of “Isa millionaires”.
The current annual Isa limit is £11,520 for 2013/14, half of which can be held in cash and half in investments.
The newspaper reports that while Isa millionaires represent a very small proportion of the total number of Isa savers, it suggests the proportion of those with £100,000 or more in Isas equates to around 2 per cent of investment Isa savers.
The Treasury is also said to have gauged opinion on reducing the amount that can be taken from a pension pot at age 55. Options discussed include reducing the tax-free lump sum from 25 per cent to 20 per cent, while another suggestion is to cap the total amount that can be withdrawn at age 55.
A Treasury spokesman told the paper: “As you would expect, there will be plenty of discussions going on about pensions tax relief, but reducing the lump sum is not within the thinking on those conversations.
“Over the course of the summer, the Treasury did go out in listening mode but officials weren’t putting proposals forward.”