The idea of simplifying the Isa system has been knocking around for some time but unfortunately action never arrives.
I most recently wrote about why we need to ditch the crazy Isa rule of only being allowed to save or invest into one of each type every year, more than two years ago.
And that is a theme that I had already banged the drum on many times before that too.
Forget raising the Isa allowance – although a boost that at least took into account inflation would be welcome – this change would benefit all savers and investors not just the ones with the deepest pockets.
The Isa is a fantastic invention. It wraps around your savings and investments, protecting them from tax on interest, profits and dividends, and is a wonderful way to build long-term wealth.
That’s become even more important in recent years, as the Chancellor has decided to hammer small investors on capital gains tax and dividend tax, savings rates have climbed pushing more people into having interest taxed.
And this is all happening while the income tax threshold freeze is dragging more into the 40 per cent tax band.
Stick your savings or investments in an Isa and you don’t need to worry though.
This is why, to my mind, outside of the money you stash away for your pension, saving or investing into an Isa is a no-brainer.
> The essential guide to Isas: What you need to know about tax-free saving and investing – and how to get started
But the Isa system also needs a radical change, because it’s not up to scratch for modern day savers and investors.
Instead, the Isa system is still stuck somewhere in the early 2000s, when choice was much more limited and the internet was taking baby steps forward.
The issue is that you can only put new money each year into a single version of each type of Isa and that doesn’t reflect how we save or invest nowadays – nor the bumper £20,000 allowance.
This anachronistic rule means you cannot save into two separate cash Isas in any given year: so you can’t put money from your annual allowance into both an easy access Isa and a fixed rate Isa.
Nor can you pay into more than one stocks and shares. This means you can’t invest a chunk to be looked after by a financial adviser or digital wealth manager and another bit that you manage yourself with a DIY investing platform.
Instead, you must make just one choice and stick with it, even if from a financial planning point of view that doesn’t make sense.
Britain’s entire consumer economy is built on the idea that choice drives competition to improve things for customers. When it doesn’t, regulators step in to try to help.
Yet, when it comes to Isas, there is a rule baked in to the system that limits choice and discourages competition
In the savings world, it stops someone sticking some cash they can lock away in a top fixed rate Isa, such as Shawbrook Bank’s 5.83 per cent deal, and then some cash they might need to access in a top easy access cash Isa, such as Moneybox’s 4.75 per cent deal.
In the investing world, there is also choice about how to invest that’s limited by the Isa rule.
You have established DIY investment platform players, offering funds, trusts, shares and more, digital wealth managers and robo-advisers, and trading apps that offer free share dealing.
Some are better or worse for different things, all offer Isa accounts, and yet you could only pay money into one of them each year.
That limits competition between the well-known DIY investing platforms and hinders people considering trying out a rival.
New entrants coming to the market have to not only compete with established big name rivals, but also overcome people’s inability to dabble with a newcomer with just a bit of their investments each year.
It also causes issues with FSCS protection for those with sizeable investment pots: only up to £85,000 per platform is covered if something goes wrong but the rules actively discourage spreading money around.
And finally, the just one Isa rule looks even dafter when you consider that you can put new money into as many different pensions as you want each year.
If the pension system can cope, so can the Isas.
So, come on, Jeremy Hunt, be the Chancellor who sorts this out and give savers and investors a boost rather than hammering them again.