Investments suffering because of failure to track inflation, expert claims

Thu, 22 Mar 2007

People looking to start saving money via investments are effectively worse off now than ten years ago because of chancellor Gordon Brown's failure to update thresholds on individual savings accounts, it has been claimed.

Investments specialist Alliance Trust has pointed out that, if the savings limit on equity individual savings accounts had increased in line with consumer prices index inflation since launch, people would now be able to invest £7,892 every year.

Instead, under the proposals set out by Mr Brown in yesterday's Budget, they will be able to invest £7,200 in a year's time.

This effectively means that people have seen their individual savings account annual allowance fall by ten per cent, the financial services provider explained.

"We will continue to call on the government to offer real incentives to investors and to move the Isa [individual savings account] model along with the times by increasing the investment limit to reflect inflation rates," pledged Malcolm Dodds, savings specialist at Alliance Trust.

Aside from individual savings accounts, Alliance Trust also claims to be one of the five largest providers of self-invested personal pension schemes in the UK.

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