Ever the one to tinker, Gordon Brown announced that the maximum amount that can be saved in a cash ISA is to be increased from £3000 to £3,600 annually and for ISAs in total from £7,000 to £7,200 annually.
The measures, due to take effect from April 2008, were greeted with a healthy amount of scepticism - Richard Wastcoat, UK Managing Director of Fidelity International, making the point that giving a significantly larger increase to the cash rather than the equity element of the ISA sends the wrong message to the market at a time when the government claims to be trying to encourage long-term saving.
"With longer investment horizons, savers need to get the message that equity-based investment can offer better returns over the long term.
"As Ed Balls said in November, 'our aim is to further promote share ownership by encouraging savers to diversify their assets and benefit from the potentially higher returns offered by stocks and shares over the long run'. Wasn't Gordon Brown listening?"
Wastcoat added - not surprisingly - that making it more tax-efficient to save will go a long way in encouraging consumers to make more provisions for their future. To that end Fidelity is urging the Government to address this at the next budget by raising the limit to a more realistic £10,000.
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