Savers are calling on the government to increase the annual ISA allowance to encourage more people to save, despite the recent the increases to the ISA limits.

While the annual ISA allowance has been raised by £3,000 to £10,200 from today, research by moneysupermarket.com suggests that savers want the government to do more to help people save, with 93 per cent calling for a further increase to the ISA limits.

In addition, 56 per cent of savers believe that all types of savings accounts currently on the market should offer tax free returns.

The price comparison website claims that with the Base Rate remaining low over the past 12 months and rising inflation, savers have found it difficult to get ‘real returns’ on their savings.   

Commenting, Kevin Mountford, head of banking at moneysupermarket.com, although acknowledging that Chancellor Alistair Darling announced in his Budget speech last week that the ISA limits will increase annually with inflation, he believes a “greater tax free allowance” is still needed.

“If more people are to be encouraged to save then it’s going to take more than an increase in allowance – we need to see more attractive rates from providers,” he said.

However, the price comparison website suggests that savers have to be “savvy” and shop around to ensure they make the most of their tax free savings allowance.

“In the current low rate environment many may think it is easier to stick with your existing savings provider, however it is more important than ever to consider switching to the best paying ISA account in order to make your money work harder for you,” Mr Mountford added.

© Fair Investment Company Ltd