View more on these topics

Treasury rejects IPPR call to axe equity Isas

A call by influential thinktank the IPPR for the Government to scrap equity-based Isas has been met with incredulity by the investment industry.

The IPPR says equity Isas have missed the Government&#39s target audience and that the £600m which the tax relief costs should be used elsewhere.

It says the income profile of Isa savers in 2001 was no different to Pep and Tessa holders in 1997 before Labour came to power.

The IPPR questions whether the product has met Labour&#39s stated aim to provide a savings vehicle for low-income and medium-income families, particularly people earning £10,000-£15,600.

It recommends April 2004, when dividend tax relief is scrapped, as a good point for the abolition of equity Isas as part of a wider rejig of savings policy.

Research fellow Will Paxton says: “It is not clear what exact policy objective equity-based Isas achieve. We are not persuaded that abolishing them would have any macroeconomic impact – the money would just go into pensions instead. We would be happy to see the money going into a more progressive and coherent savings system.”

IMA chief executive Dick Saunders says: “This is misguided and goes against what the Treasury has been trying to achieve. Peps and Isas have the same profile, as they are largely the same product and have been very successful in extending equity ownership down the income scale. The money would not go into pensions but on deposit.”

A Treasury spokesman says the IPPR&#39s criticisms are misguided and that equity Isas will continue to have an important part to play. He says cash Isas were there for lower-income groups.

Recommended

Mortgages plc in loan design deal for regional societies

Mortgages plc is setting up an initiative aimed at helping regional building societies compete with bigger lenders.The scheme, called Mutual Co-Operative, will work with a group of societies to design products and criteria, agree the terms and volumes of business, sell the mortgages over a set period and pass tranches of assets on to the […]

Odey Asset Management – Pan European Fund

Wednesday, 12 February 2003 Type: UCITS Aim: Growth by investing in European equities Minimum investment: Lump sum euros £100,000 Place of registration: Dublin Investment split: 100% in European equities Charges: Initial 5%, annual 1.5% Commission: Initial 3% Contact: www.odey.com

A lost cause?

For this week&#39s article, I will continue to look at some of the less well known aspects of single-premium bond taxation. My last article considered the situation where a client has gains under a bond and also chargeable gains liable to capital gains tax.However, in the current difficult investment conditions, many clients may find it […]

FMO setting up adviser network

First Mortgage Options, which provides nonconforming and sub-prime loans, is setting up an intermediary network offering exclusive products, services and technology support.FMO is aiming to have 200 member firms in six months and 450 by the end of the year.It is running a series of 18 roadshows in the UK to attract members starting in […]

Embrace simplicity!

By Fiona Holmes, proposition communications manager When I first took out critical illness cover, I was overwhelmed. It wasn’t just the form filling, it was finding out about the sheer number of illnesses I was covered for. Did it give me peace of mind that I was covered for neuromyelitis optica or systematic lupus erythematosus? […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com