Merging cash ISAs with stocks and shares ISAs would make it easier to save and invest, Baroness Helena Morrissey has claimed. The Conservative peer, who at one point was in charge of over £840bn of people’s savings while head of personal investing at Legal & General, said there was a need for ‘systemic change’ and that Brits needed to be encouraged to save more.
Chancellor of the Exchequer Rachel Reeves has come under fire for reportedly planning to either scrap the cash ISA, or reduce the £20,000 annual allowance, with a cap on £4,000 being considered.
Her plans have been met with widespread criticism, with many cash ISA savers and providers claiming that if the tax-free accounts were cancelled saver’s retirement and house buying plans would have to be put on hold.
Baroness Morrissey said merging ISAS would also help those who were nervous about investing in shares and that savers in cash ISAS had missed out on over £6.6bn by putting their money in safer, but less profitable accounts.
The former City fund manager, said she understood why savers may be reluctant to invest in shares and said she only started investing regularly for herself during the Covid-19 lockdown.
The Baroness was speaking at the launch of A J Bell’s report Closing the Gender Gap, which was published in the same week as International Women’s Day.
Morrissey, who is an ambassador for the AJ Bell Money Matters campaign said the financial services industry needed to address the jargon it used to explain investments.
She said and that this put off many more women from investing, despite women being more likely to open an ISA than men.
AJ Bell’s report found women on average have slightly higher stocks and shares ISA balances than men during their formative years.
“On the AJ Bell platform this includes when girls have Junior ISAs from 13 until the accounts mature at 18 and the pattern continues until they are 28.”
By the time they are in their 30s women have 46% less in their ISAs than men, mainly because they leave work to have children or take career breaks to care for relatives. Their ISAs tend to be worth less because men are using their allowance to invest in stocks and shares, which over decades can generate a better return.
