ISA Allowance of £20,000 would encourage business investment, claim Prudential and Alliance Trust
Prudential and Alliance Trust chief executives Tidjane Thiam and Katherine Garrett-Cox have called for the ISA allowance to be doubled, in order to help boost business investment in the UK.
The chief executives, who are both members of the Prime Minister's Business Advisory Group, have urged the government to raise the total annual ISA allowance from the current £11,520 level to at least £20,000. They argue that such a move would encourage a savings culture in Britain and, in turn, boost business investment.
Writing for the Telegraph, Tidjane Thiam and Katherine Garrett-Cox argue that "one of the key engines of business investment is household savings", pointing out that "the savings of ordinary families, whether they are held in bank accounts or by fund managers and insurance companies, provide a significant portion of the finance for long-term business investment."
Savers in need of encouragement
Thiam and Garrett-Cox believe a culture of saving rather than spending must be encourages in Britain, and that in order for this to occur "we need good-value savings products and very clear incentives from government to save." Raising the ISA allowance would, they argue, provide a much-needed incentive for savers by sending the message that they are "once again valued within our society…and play an important role in securing our long-term economic recovery."
The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.