Time for ISA Innovation?
Time For ISA Innovation Header

Time for ISA Innovation?

01 April 2015

Proposed changes to ISAs in the recent budget are a call to action for providers and savers alike.

Equiniti has two Stocks and Shares Individual Savings Account products; the Equiniti Shareview Dealing ISA and the Selftrade Shares ISA. With these offerings to oversee, Mark Taylor, Equiniti’s Director of Investment Services, keeps a close eye on the ever changing savings market. Post budget, Mark sees the current time as ripe for product development and innovation.

Is no news good news?

The Chancellor made no particular reference to Stocks and Shares ISAs. However, as post budget changes are likely to have a knock-on effect on the Stocks and Shares ISA market, the following changes are worth noting. And don’t forget that since 6 April, the annual ISA allowance is now £15,240. Remember, it is never too soon to open an ISA.

Personal Savings Allowance rise

The most noteworthy change is the 2016 introduction of the £1000 tax-free ‘Personal Savings Allowance’ for basic tax payers and £500 equivalent for higher rate taxpayers. Interest of up to £1000, made on any savings, will no longer be subject to tax. This is in addition to any savings held in a Cash ISA, for example in a bank or building society savings account. This rise in Personal Allowance could serve as an introduction to the concept of ‘tax-free’ savings enjoyed by ISA holders. It could also create a shift in behaviour with respect to Cash ISAs. 

Game-changing for Cash ISA

The Personal Savings Allowance increase could be a game changer for Cash ISAs as they will no longer have unique proprietary rights over a ‘tax-free’ benefit; previously their unique selling point (USP). In the coming months, this could prompt innovation in the Cash ISA market as providers try to redefine their offering. In the meantime, the positioning of Stocks and Shares ISAs remains the same and stable; markedly different from the Cash ISA whose ‘tax free’ USP is no longer so ‘unique’. It seems that, post budget, Stocks and Shares ISAs have more ground for development.

Drawing down pensions

As we all know, from April this year retirees will have more control over their pension funds. Those who opt to drawdown their pensions may be looking to maximise their resulting savings. For the Stocks and Shares ISA market, this is an opportunity to attract an additional audience. Therefore, we may see further product development for this audience. 

Equiniti Stocks and Shares ISAs

Selftrade, part of the Equiniti Group since 2015, offer a competitive Shares ISA. For those who subscribe to a Selftrade ISA, with a minimum amount of £1,500 before 30 April 2015, there is a chance to win a Samsung Galaxy TABPRO 10.1” 16GB tablet. Terms apply, excludes Northern Ireland.

Please note: The value of investments can fall as well as rise. Any income from them is not guaranteed and you may get back less than you invested. The extent and value of any ISA tax advantages or benefits will vary according to the individual’s circumstances. The levels and bases of taxation may also change.

Selftrade is a trading name licensed to Equiniti Financial Services Limited who is authorised and regulated by the Financial Conduct Authority.

See here for details about the Selftrade ISA and subscribers’ competition.
See here for details about the Shareview Dealing ISA and subscribers’ competition.