Concerns about the complexity of the British Isa means providers are cautious about whether they would offer the product if it was rolled out.
The government is currently consulting on the new Isa which would see an additional £5,000 allowance available for savers, which would be invested in UK assets.
AJ Bell was one of the firms to come out strongly against the British Isa but has since said this will not stop it providing the product if it does end up being introduced.
Michael Summersgill, chief executive at AJ Bell, said for most people the new Isa would add unwelcome complexity which could put people off saving and investing.
A spokesperson for the firm told FT Adviser it will engage in the consultation process and put forward the view there are better options, but if it is rolled out it would “certainly offer it”.
They said: “At the end of the day it’s an additional Isa allowance and we’re one of the leading stocks and shares Isa providers so we’re broadly in favour – we just believe there is a much, much better way forward than the British Isa.”
Jenny Davidson, commercial proposition director at Quilter said the firm is holding off making decisions on whether it would introduce the Isa and pointed out it could create complexity for customers and providers alike.
She said: “Quilter is supportive of any initiative that encourages tax efficient saving among the public but has some concerns that the British Isa may add confusion and complexity to the once-simple Isa brand.
"Moreover, we doubt that the British Isa alone can address the fundamental issues that affect the UK stock market and economy, such as competitiveness, innovation, and regulation.
“We will therefore engage with the forthcoming consultation and will not be making any proposition decisions until more is known about the final construct.
“The British Isa needs to be implemented in a simple way otherwise the complexity it could create for customers and Isa administrators would be greater than any value it generates.”
Alastair Black, head of savings policy at Abrdn, said “considerable challenges” with the proposed Isa include which investments will be allowed and the treatment of interest on cash.
Black said: “Depending on how these issues are managed the solution could be complex to build and difficult to understand for consumers.
“The complexity of the solution and customer and adviser demand will influence whether we choose to develop this.
“We continue to believe raising the Isa limit to £25,000 unrestricted would lead to a better outcome as it would be simple to implement and understand and the UK would get its fair proportion of a diversified portfolio of investments.”
Aegon also said it would be raising concerns as part of the consultation process and added thought needs to be given to whether the new Isa would be the best thing for retail investors.
