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SYS-CON MEDIA Authors: Liz McMillan, Pat Romanski, Carmen Gonzalez, Kevin Jackson, Peter Silva

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Confusion Reigns Over ISA Transfers From Stocks and Shares to Cash

Nationwide calls for greater flexibility in the ISA system

LONDON, UNITED KINGDOM -- (Marketwired) -- 03/21/14 -- More than one in ten (12 per cent) of the UK's over 45s population with a stocks and shares ISA have considered transferring these funds into a cash version, according to new research(1) from Nationwide Building Society, even though they cannot do so under current ISA rules.

The survey highlights that the primary rationale (40 per cent) behind this is the feeling amongst savers aged 45 and over that their money would be safer in a cash ISA. Nearly a third of them (31 per cent) admit that they want greater flexibility to manage their finances, which they believe a cash ISA can offer.

Of those who hold both types of ISA, three in ten (30 per cent) of over 45s hold more than 50 per cent of their ISA savings in a stocks and shares ISA. Nearly one in ten (nine per cent) have also used up their full stocks and shares ISA allowance for the 2013/14 tax year. Unfortunately, as the rules currently stand, people only have two choices: either leave the funds where they are, or withdraw them and lose the ISA wrapper.

That is why Nationwide Building Society and its Chief Executive, Graham Beale, are calling for changes to the current ISA system, including allowing people to transfer from stocks and shares ISAs into cash ISAs.

However, despite the desire to transfer from stocks and shares ISAs to cash ISAs, three in five people (60 per cent) over the age of 45 are unaware that they cannot do it.

Graham Beale, Nationwide Building Society's Chief Executive, comments: "I would like the Chancellor to allow people to transfer out of stocks and shares ISAs and into cash ISAs. This would be particularly helpful for those older savers approaching retirement who have stocks and shares ISAs but want more flexibility about how they manage their capital and access their cash, especially those who prefer to de-risk their capital by putting it into cash savings rather than stocks and shares. Certainty of income and protecting capital is hugely important for older savers, particularly where it is a vital part of their retirement income. So, it is no surprise to see our research show that while one in five older savers have a stocks and shares ISA, more than half of them have thought about transferring to a cash ISA."

ISA parity

HMRC data suggests that in 2012/13 approximately four cash ISAs were taken out for every one stocks and shares ISA(2). This backs up the Society's research findings that a large proportion of savers want the greater flexibility to manage their finances that cash ISAs allow.

Nationwide's research also highlighted that more than a third (36 per cent) of Britons with a cash ISA have used up their full cash ISA allowance for the 2013/14 tax year. This compares to just eight per cent with a stocks and shares ISA who have done the same.

Graham Beale continues: "At present, you can put twice as much money into a stocks and shares ISA than you can into a cash ISA, which clearly means people with stocks and shares ISAs have the potential to earn more tax-free interest than their cash ISA saving counterparts. This doesn't seem fair to me, so in the run up to this week's budget, I wrote to the Chancellor calling on him to increase the cash ISA limit so it is equal to the higher stocks and shares ISA limit."

To read our Chief Executive, Graham Beale's full thoughts on the current ISA system, please click here: http://your.nationwide.co.uk/your-news/chief-executive-blog/Pages/equalise-isa-limits-to-help-support-savers.aspx

Notes to editors:

(1) All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 5,584 adults. Fieldwork was undertaken between 7th - 11th March 2014. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

(2) HMRC data for 2012/13 shows there were 11.7 million cash ISAs taken out and 2.9 million stocks and shares ISAs.

Find recent press releases and photos at the Nationwide Media Centre: www.nationwide.co.uk/mediacentre

Twitter: @NationwidePress

YouTube: http://www.youtube.com/user/NationwideBSocietyUK

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