New £15k ISA will encourage savers to build financial resilience

“The simplification and increase in the ISA allowance to £15,000 is a positive step to encourage people to save and build financial resilience, and gives people the flexibility to invest all their allowance into a stocks and shares or cash ISA.

“Our figures show that if you had been able to invest £15,000 tax free in an equity fund in the IMA UK All Companies sector over the last 15 years through regular monthly contributions, on average, you would have seen a return of £480,000 compared to £275,000 in a tax-free cash ISA. Even a more modest £200 a month, would still have grown to a value of £77,000 in a stocks and shares ISA compared to £44,000 in a cash ISA.

“The benefit of setting up a regular contribution over making one lump sum payment is that it reduces the impact of markets going up and down. It’s also a very good discipline to ensure you keep investing over the long-term.

“The increased allowance is also to be welcomed because the sums invested in ISAs are then allocated by investment managers to the companies that will drive GDP growth, create new jobs and produce the tax revenues that underpin infrastructure, education and the welfare estate.”