Plans for a British Isa have reportedly been scrapped by the Government even thought it insisted it would not do so only months ago.
Investors were set to receive £5,000, on top of their existing £20,000 tax-free allowance, to invest in London-listed stocks and boost UK businesses.
But now the Government is said to be planning to drop the account in a U-turn, over fears it could ‘complicate’ the market.
The plans were drawn up by the previous Conservative government during the spring Budget earlier this year.
Labour said on the campaign trail that it had no plans to scrap the British Isa. But a Government source yesterday told the Financial Times: ‘We are not planning to complicate the Isa landscape even further.’
The plans were drawn up by the previous Conservative government during the spring Budget earlier this year (stock image of London’s financial districts)
Labour said on the campaign trail that it had no plans to scrap the British Isa. (Pictured, Keir Starmer leaves Downing Street)
Investment leaders had warned the plans would confuse the already complex Isa system.
Michael Summersgill, chief executive of investment platform AJ Bell, said: ‘The UK Isa was a political gimmick. The new Government will hopefully take a more sensible approach to Isa reform, focused on simplification for the benefit of consumers.’
However, some City figures said more needs to be done to drive investment into UK companies.
Savers can invest up to £20,000 a year into Individual Savings Accounts (Isa). Mr Summersgill said changing the allowance to £25,000 would boost investment.
A Treasury spokesman said: ‘No decisions have been made. The Government will provide further information in due course.’