Let’s hope a cap on ISA investments isn’t on the agenda for the Autumn Statement

1st December 2014


Could the Chancellor George Osborne, having given with one hand in the Budget, take away with the other, in the Autumn statement? Well, there is some renewed discussion of a cap on ISA investment.

The issue has been raised on the Citywire website by Baker Tilly’s senior tax partner George Bull.

Mr Bull notes that last year a cap of £100,000 was mooted which could have caught out rather a lot of Isa investors. He says there could be some sort of restriction on the amount that can be invested. We presume this might be some sort of lifetime cap and Mr Bull also suggests that some form of protection is likely to be afforded to those who would be over the limit as happened with the lifetime limit on pensions.

At Mindful Money, we think it is unlikely, as the ISA move has proved very popular and it seems churlish to then restrict the measure only a few months later.

Ideally in a nation of savers and investors, people would have enough cash to devote to a pension and to their ISA investments. Targeting at least £100,000 of accumulated ISA investments seems like a very good goal. It would be great if such an ISA habit extended further across the population. A cap would surely send a very conflicting signal.

Of course, it is likely that some of those who have benefitted from the uplift, may have very substantial investments already and have been able to shelter more of it from CGT as a result of the ISA extension. They may intend to keep doing so, each year.

That might be why this issue keeps raising its head and there may be calculations around a loss of CGT that alarm the Treasury. But at Mindful Money we hope they bear in mind that bringing in a cap could disincentivise others from savings.

And we rather hope it isn’t on the agenda at all.

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