Budget ISA increase not enough for 61% of savers

27 April 2009 / by Rebecca Sargent
Alistair Darling's Budget announcement that the ISA allowance will increase from £7,200 to £10,200 per tax year has disappointed 61 per cent of British savers, research from moneysupermarket.com has revealed.

According to a user poll carried out by the comparison site, almost two thirds of respondents said that they thought the Chancellor should have done much more for savers than the ISA increase alone.

Meanwhile, just under a quarter believe that the measures will help to some extent, but that more is needed and just 16 per cent believe that Darling did what he could with limited resources.

Commenting on the poll, Kevin Mountford, head of banking at monesupermarket.com, said: "The increase in the total ISA limit to £10,200 is a step in the right direction to help the nation's savers. However, this is by no means enough to make a real impact on consumers."

The increased ISA allowance will be made available to people over the age of 50 from October 6 this year, while all other savers will have to wait for the next tax year. Mr Mountford added:

"The delay in allowing those aged under 50 to benefit from the increased limits will come as a sore disappointment to many savers. What’s more, even the over 50s who benefit from a higher allowance this tax year, have to wait until October before they can invest the extra, meaning they'll miss out on six month's tax-free interest.

"Savers have been hit hard by the recent interest rate cuts, and the Government should be doing as much as possible to encourage people to save.

"The Budget will only scratch the surface of a very deep rooted problem," he concluded.

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