ISAs are a good concept but terribly executed. It takes me a half-hour to open an ISA (and thus a half-hour for the bank clerk too) and moving to a new ISA prov ider is also very time-consuming so people tend to stay with their current provider who is thus tempted to provide awful interest rates.

The purpose of ISAs is to encourage people to save by giving them an interest-free allowance of 5,100 pounds each year, cumulating each year if they save each year.

Outsourcing the administration of this concept to banks and building societies has not been a success. The whole ISA system should be replaced by a government-administered system. Ideally, include the "ISA allowance" in the tax return system. As a second best, scrap commercial ISAs and implement a central ISA-like system within National Savings

Why is this idea important?

ISAs waste a huge amount of time for the customer and incur huge costs for the ISA provider. This is all totally non-productive. Many tens of millions of pounds would be saved by avoiding this waste. And consumers would get a better deal because banks etc would no longer be able to exploit people's unwillingness to waste their time switching ISAs – currently banks can drop ISA rates for existing customers and get away with providing awful returns.

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