Removing basic rate tax on savings accounts, proposed by Conservative leader David Cameron yesterday, could boost investment in stocks and shares, according to Interactive Investor (II).
The fund supermarket says tax-free cash savings could promote a long-term investment culture, currently absent in the UK.
II believes many savers with ash ISAs would move their cash funds into stocks and share investments if Cameron's proposals were implemented.
Currently UK investors can invest up to £7,200 a year into a tax-free ISA, with a maximum of £3,600 in cash.
"The result of the proposed changes could be that basic rate consumers choose to use more of their ISA allowance in stocks and shares rather than cash," says II's head of investment, Rebecca O'Keeffe.
"This could help to encourage a greater long term investment culture in the UK."
O'Keeffe welcomes the Conservatives' proposals, but says an increase in ISA limits to £10,000 would do the most to help UK consumers to save efficiently and mitigate tax.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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