With new rules allowing investors to place any combination of cash or stocks and shares investments in an Isa up to the limit, the founder of Hertfordshire-based One Life Wealth Planning, said: “Inexperienced investors tend to prefer cash Isas over stocks and share products.
“The increase in the Isa allowance to £15,000 is great news, but those who prefer to invest up to that amount solely in cash could be exposed to inflation, just as they would with any cash investment.
“It’s better to use the allowance up than not, but I would urge them to consider stocks and shares Isas as well.”
Delivering last week’s Budget, George Osborne cited the desire of 24m Isa customers to save more, and pledged to help savers by “dramatically increasing the simplicity, flexibility and generosity of Isas”.
Junior Isa limits were also increased from £3,840 to £4,000.
Dan Attwood, proposition manager of index funds at Legal & General Investments, said the investment industry had to play its part and offer “simple, efficient and cost-effective” ways for the public to invest in stock markets.
He said: “Investing really doesn’t get any more straightforward than buying an index tracker fund for a flagship index like the FTSE 100. This is one area, however, where taking the simple and low-cost option doesn’t mean you are compromising on quality.”
Steve Gazzard, chief executive of the Institute of Financial Planning, said: “Consumers need help to understand the different types of risk and the implications they may have on their financial situation. This is especially so in a low interest-rate environment, given the potential this brings for reductions in the real value of assets.”
Gordon Hull, director of Axa’s non-advised Self Investor service, welcomed the changes to the Isa regime.
He said: “These measures make it easier for savers and investors to mix and match asset classes within one tax-efficient product, and present a great opportunity for people to re-engage with their finances and take control.”
ADVISER VIEW
Kay Ingram, divisional director, individual savings and investments, at national advisory group LEBC, said: “The extra choices carry more personal responsibility for individuals to use their accrued wealth wisely.
“Liberalising the rules does not make the problem go away – it just makes the individual more responsible for his own future.”
