Chancellor urged to revamp cash ISAs

familes saving money are reminded to make the most of their nest egg

familes saving money are reminded to make the most of their nest eggHave you been disappointed by the returns offered by your savings account in the last two or three years?

With the Bank of England maintaining its base rate at a record low of 0.5% since March 2009, it's been tough for savers to find accounts which provide decent returns on their cash.

As the Chancellor prepares to announce his Budget on Wednesday, Nationwide has called for a major shake-up of the ISA system.

According to the building society, the cash ISA limit should be raised to £10,680 in order to provide a boost to ordinary savers and first-time buyers who are finding it hard to save towards a mortgage deposit.

Although the stamp duty holiday for first-time buyers is due to end later this week, the firm suggests that a higher ISA allowance might help to reduce the impact of this.

Graham Beale, chief executive of Nationwide, said: "Many savers prefer the security of cash savings, but the current ISA restrictions are limiting the amount they can save tax-free.

"If the cash ISA limit is increased to £10,680 from its current limit of £5,340 it will not only help savers address the inflationary pressures, but also help borrowers struggling to raise a deposit."

Check out this guide to find out more about how to pick a savings account.