Isa cash switch on the cards

PEOPLE with investments in Isas may be allowed to switch their funds from a cash investment to one based on the stock market, the Government said today.

Financial Secretary Ruth Kelly said the Treasury would consider proposals to relax restrictions on the schemes as part of a wider review.

The changes had been suggested by shadow paymaster general Howard Flight as he opened the second day of debate on the detailed report stage of the Finance Bill, which puts into effect April's Budget.

He acknowledged that the Government's scheme had been very successful in encouraging more people, at all levels of society, to save. But with levels of saving still dangerously low, he said, it was vital to make them even more attractive and savers should no longer be tied to an initial decision to opt for cash-based investment.

Although he recognised that guaranteed returns were more appealing today, with share values plunging, he said that would not remain the case forever. Investment in securities had been the original idea behind Isas, he noted.

Ms Kelly told him the rules regarding Isas were kept constantly under review and that the Government was prepared to consider implementing the proposals.