The City wants more investment in stocks but there is a school of thought that the move could reduce availability of mortgages for first-time buyers.
Nationwide has issued a warning to Labour Party Chancellor Reeves against cutting tax breaks on cash Isas. The City wants more investment in stocks but there is a school of thought that the move could reduce availability of mortgages for first-time buyers.
Tom Riley, director of retail products at Nationwide building society, a leading provider of the tax-free accounts, said: “Cash Isas not only help ordinary people save efficiently but enable us to fund our first-time buyer lending.”
He added: “Any limitations on lending would further impact those looking to get a foot on the housing ladder at a time when saving for a deposit remains a significant challenge.” Nationwide is one of the UK’s biggest mortgage lenders and in November it announced “record” growth in home loans and deposits.
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Andy Moody, chief commercial officer at Leeds building society, said there would be “a significant detrimental impact on mortgage lending, including the thousands of first-time buyers we support every year, if the cash Isa rules were undermined”.
Chris Irwin, director of savings at Yorkshire building society, said removing cash Isas as an option for savers would “have detrimental impacts on the financial wellbeing of many, along with increasing their tax liability”.
“I am writing to put on record how strongly we disagree with the recently reported calls from City firms to restrict cash Isas,” said Building Societies Association (BSA) chief executive Robin Fieth, responding to reports that first emerged in the Financial Times.
Andy Briggs, the chief executive of Phoenix Group, which describes itself as the UK’s largest long-term savings and retirement business, said in a statement this week: “While we do not support the total removal of cash Isas, we do urge the government to consider how tax policy can better support long-term growth for individuals and the wider economy.”