Benefits of Isas 'being eroded by inflation'
The tax-incentive of individual savings accounts (Isas) is being eroded by inflation, it has been claimed, leading to calls for an increase in the maximum limit of investment in the account.
Investment trust company Alliance Trust has welcomed steps the government has announced to simplify the Isa system, but noted that had the upper limit of initial investment risen in line with inflation, it would now be £7,677, rising to a projected £8,310 by 2010.
Malcolm Dodds, personal equity plan (Pep) and Isa manager at Alliance Trust, said: "More than one in three adults have an Isa and this government commitment will lead to many more people seeing Isas and Peps as part of their long term retirement savings portfolio."
He added that the government should simplify the system further still and "enhance the annual subscription" of the savings accounts.
Investment manager Invesco Perpetual also called for an increase in the subscription level in the imminent Isa review.
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