In a report on Wednesday (8 November), The Telegraph suggested existing ISA rules could be relaxed from April next year to allow savers to pay into multiple ISAs of the same type in a single year without affecting their £20,000 allowance.
The report explained that ministers expect the changes to encourage providers to offer more competitive rates and help consumers make more in tax-free interest.
Provider AJ Bell has campaigned for reform and simplification of the savings product to boost access and usage. It explained the current rules mean people can open multiple ISAs in a tax year but they must be different types. It said relaxation of the rules could pave the way for more "radical reforms".
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The provider has pushed for the introduction of ‘One ISA' to help people save and invest while giving greater simplicity. According to the firm, reform could create the foundations of an "investing revolution when combined with review of advice/guidance boundary".
Head of retirement policy Tom Selby said that if the government brings forward this review, it could be a "huge step" toward a "radical simplification" of ISAs.
"It provides a real opportunity to develop long-term proposals centred around stripping away unnecessary complexity and creating a single, simple ‘One ISA' product that incorporates the best features of the existing landscape," he said.
"Coupled with reforms designed to boost the financial help available to millions of Brits, this could create the foundations of an investing revolution in the UK. Given most investors display a significant ‘home bias' when choosing their investments, that revolution should, in turn, help drive more capital to UK businesses.
<span "="">Autumn <span "="">Statement set for 22 November 2023
The rule preventing ISA savers from subscribing to more than one version of each type of ISA "never made much sense", he argued, noting that ditching this rule removes one of the "key blockers" to more fundamental reform and would be "an extremely welcome step in the right direction".
He added that AJ Bell had led calls for simplification of the ISA landscape and engaged with the government on the issue: "It is ridiculous investors are currently faced with a choice of six types of ISA when deciding where to invest for the future, with different rules and allowances further clouding the picture.
"Our research suggests this unnecessary complexity acts as a barrier to people saving and investing for the future, hampering their own financial prospects and those of the companies they might otherwise invest in."