PIMA SURVEY SAYS THAT CONSUMERS WANT ‘TAX FREE’ ISAs
New consumer research commissioned by the PEP and ISA Manager’s Association (PIMA) reveals that the key factor in motivating consumers to invest in ISA’s is the tax-free status they provide and that current Treasury plans to remove the 10% dividend tax credit would significantly undermine new ISA saving – a key element in the Government’s stated policy.
The key points from the research are:
If the tax-free benefit is reduced or abolished on stocks and shares ISA’s, only a third of existing customers would continue to invest in these products.
A knock-on effect for the rest of the equity markets could also be expected, as only two-fifths of customers would expect to invest in these commodities.
Six in ten consumers expect to seek alternative, tax-free investments in ISA’s, with high interest accounts, pensions and cash ISAs being the likely beneficiaries.
Seven people in 10 are of the view that the proposal would be seen as another Government stealth tax.
Tony Vine-Lott, Director General of PIMA said “Savers obviously see the tax-free advantage as the key element to their decision to invest in ISA’s. If the Government persist in their resolution to abolish the tax credit, then they are particularly disadvantaging the very people they claim they wish to encourage to invest in the first place. This is very bad news for everyone – savers, industry and Government alike.”