The majority of financial advisers in the UK said that Individual Savings Accounts (Isas) have become too complicated, according to research by AJ Bell.
Three quarters think there are too many different Isas available on the market, while a fifth said that government interference was to blame.
Around 75% of respondents claimed that a single Isa product is more than enough to provide what most clients need.
Andy Bell, chief executive at AJ Bell, said: “When you take a step back and think about the fact we now have at least six versions of what started out as a very simple product, it seems completely absurd.
“It is a classic case of product over engineering centred in political point scoring rather than focusing on the needs of customers.”
Change needed
AJ Bell wrote to the UK chancellor, Sajid Javid, calling for a review and simplification of the Isa system, which was backed by 92% of IFAs.
A policy paper named ‘One Isa’, was included in the letter to outline how the existing versions of the product can be consolidated into one.
The financial secretary to the Treasury, John Glen, replied to the investment platform: “The government is committed to supporting all savers of all incomes and at all stages of life.
“Isas are a key part of this support… It is therefore important that the scheme remains simple and sustainable for consumers and savers alike.”
Cost-neutral
Subsequently, Glen asked to set up a meeting with AJ Bell to discuss the ‘One Isa’ proposal further.
“It’s not too late to change,” Bell added.
“Isas are still very popular and it would be relatively easy to wind all the current versions back into a single Isa product.
“I think this would be an extremely positive and popular change that would be welcomed by consumers, financial advisers and Isa managers.
“I also think it can be implemented in a way that is cost neutral to the government.”
AJ Bell’s research surveyed 261 advisers in September 2019.
