Government should not cut cash Isa allowance, says Treasury Committee

Andrew Prosser, head of investments at InvestEngine, said: “The committee’s report makes a well-reasoned case for maintaining the cash ISA limit.

“Cash ISAs play an essential role for millions of savers across the UK. While the government is right to explore ways to encourage more people to invest, cutting the Cash ISA allowance is unlikely to achieve that goal.

“Instead, many savers would just choose to hold their savings outside the ISA wrapper and could simply end up paying more tax on the interest they earn as a result.

“The committee is right to call for greater focus on improving financial education and access to quality advice on investing, something we’re highly focused on at InvestEngine.

“Helping people understand how investing works and giving them the tools to make confident, informed choices will do far more to boost participation than limiting options for those who want to save.

“Encouraging more people to invest is a worthy goal, but it will be best achieved by simplifying the ISA system, improving awareness and making investing more accessible – not by penalising prudent savers.”