Investors with cash individual savings accounts (ISAs) will be able to swap their investments into higher-risk stocks and shares without losing their tax benefits.

The changes, launched by economic secretary to the Treasury Ed Balls, are planned to encourage savers to have more freedom to spread their assets.

ISA savings could be transferred to other investments without affecting their annual ISA investment limit, currently £7,000. They will not be able to transfer ISA funds invested in equities into cash.

While the industry welcomed the move towards flexibility, others questioned whether people with cash ISAs would be interested in swapping into equity ISAs, and that the scheme should work the other way around.

Justin Modray at Bestinvest Brokers told the FT Money that it was more common for younger people to invest in equities, then move to cash investments later in life.

Calls have also been made to increase the investment limit in ISAs.

Further reading:

IHT changes expected in pre-Budget

Educate to accumulate

Wake up equity ISAs