Savers 'believe Isa allowance rules are unfair'

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The vast majority of UK savers believe current rules on individual savings accounts Isa are unfair and penalise those wishing to minimise investment risks, it has been reported.

According to research conducted by the Clydesdale and Yorkshire Banks, 75 per cent of savers think they should be allow to place their entire tax-free allowance in a cash Isa.

At present, half the total allowance - £10,200 for over-50s and £7,200 for all other age groups – must be invested in a stocks and shares account.

Consequently, individuals who do not want to risk the volatility of the stock market are unable to make full use of their Isa allowance.

Steve Reid, retail director for Clydesdale Bank, said: "Savers and investors clearly feel they should have the right to make full use of the allowance within their risk profile.

"A higher allowance in the new tax year is of little benefit to those who are risk averse if they can only make use of half of it."

Consumers have until April 5th 2010 to take advantage of their Isa allowance for the 2009-10 tax year.

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Tags: individual savings accounts , retail director , stocks and shares , free allowance , cash isa , investment risks , risk profile , clydesdale , age groups , volatility , stock market , 163 , yorkshire , 50s , banks , consumers , investors , benefit , steve reid ,

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2010-03-15 13:24:58 © Moneyextra.com