Chancellor adds more fuel to ISA reform fire

After much rumour and conjecture, it seems that some potentially significant changes to ISAs (Individual Savings Accounts) are on the way.

We heard a lot in the build up to the Spring Statement - only to hear no words uttered by the Chancellor in relation to this. Yet, we then saw some new information come out in the Spring Statement papers, released after the Parliamentary speech, by the Treasury.

This stated: 'The government is looking at options for reforms to ISAs that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.'

Since then, Rachel Reeves, the Chancellor, has commented further. She appeared before the Commons Treasury committee on 2 April. Her comments, reported by The Independent, among other newspapers, stated: 'I do think that reform would be worthwhile and that's what we're looking at at the moment.

'I want to say that I do recognise the importance of cash for a lot of people. Already, you can save in a savings account and some of that is tax-free, the interest on that is tax-free, and also we have got the ISA limits.

'But I do want to look at the balance, because I think sometimes it's a disservice to people saving. If you think about the inflation we've experienced over the last few years, you've actually seen an erosion in the value of your savings in real terms.'

She added she doesn't want to 'rush' the changes.

At the moment savers can pay in £20,000 per year tax-free. We'll keep a close eye on developments.