Civil servants discussed cap on Isa savings

CIVIL servants have explored the possibility of imposing a cap on the amount of money that can be held in an Isa, the Treasury confirmed yesterday.

Officials held talks with leading financial services companies in recent months to discuss whether wealthy individuals should continue to benefit from holding substantial savings that will never be subject to income tax or capital gains tax.

The Treasury yesterday insisted that there were no plans to actually implement the Isa cap proposal at this stage. A spokesman said it was just one of many options that were discussed.

But the very existence of such talks will fuel outrage among middle class savers, many of whom have diligently put aside the maximum amount every year under the assumption that the rules would not be torn up retrospectively, unlike with pensions. The talks were first reported by the Sunday Telegraph.

Savers are allowed to put a maximum of £11,520 a year into an ISA, with up to £5,760 of this allowed to be in cash. Canny stock market investments have allowed some members of the public to make hefty returns in recent years.