Commenting on plans to launch a British ISA, Julie Hammerton, Partner and Head of Hymans Robertson Personal Wealth, said:

"The introduction of a British ISA is unlikely to be a meaningful way to fulfil the policy objective of boosting UK growth. While it’s great to see a long-overdue rise to the ISA allowance, encouraging people to save more in a tax efficient way, stipulating that the extra £5,000 goes towards a British ISA has the potential to be at odds with the old saying "don't put too many eggs in the one basket". A key tenet of investing is diversification. Investing across different countries is a way to reduce investment risk by avoiding excessive concentration in any one market.

“Putting money into an ISA (along with saving into a pension) is one of the first steps many will take into the world of investing. Whether an ISA focussed on UK businesses will be right for a retail investor very much depends on their existing savings, their attitude to risk and capacity for loss.

“Most people, unless they speak to a regulated adviser, won't be able to assess this for themselves. If someone takes on more investment risk through geographical concentration and that goes against them, that could dent their confidence and impact their willingness to invest savings in the future.

“This could be a potential fault line between the FCA and the government, given the FCA’s duty to protect retail investors and to promote an environment where they can achieve good outcomes. It will be interesting to see the outcome of the consultation, particularly in respect of the safeguards that will be put in place for retail investors.”

Commenting on take up on the existing six ISA vehicles, Julie Hammerton added:

“If you were designing the ISA regime from scratch, you wouldn't have six different types of ISA, and certainly not seven. The majority if ISA money goes into cash ISAs and stocks and shares ISA, with much less contributed to other options. If we take the Innovative Finance ISA as an example, of the 12m people investing in ISAs in the UK, only 12,000 invest in this.”