Greg Hands, MP for Chelsea and Fulham, has welcomed dramatic new help announced in the Budget for savers. The Budget will help those wanting to save for a home, save for their family or save for their retirement by making ISAs simpler and abolishing the 10p starting rate of tax for savings.
ISAs, or Individual Savings Accounts, are tax free savings accounts available to UK residents aged over 16. The amount that can be deposited into them each year is restricted, currently to £11,520 (or half that if cash).The Budget will make ISAs simpler, merging the cash ISA and stocks & shares ISA into a single New ISA, with an increased annual limit of £15,000.
This reform will dramatically help savers by increasing the simplicity, flexibility and generosity of ISAs. 24 million people in Britain have an ISA and millions of people would like to save more. By increasing the annual limit from £11,520 to £15,000 Government will let these people save more tax free, and by allowing savers to transfer all of the ISAs they already have from stocks and shares into cash, or the other way around, saving will be made more flexible.
This new, more generous ISA will be available from 1 July. It will make saving simpler and more flexible. 808,000 ISA holders in London could benefit from the New ISA.
The Budget also announced the abolition of the 10p starting rate of tax for savings income. The 10p starting rate for saving income was difficult to levy and penalised low income savers. The Government will therefore abolish it and turn it into a zero pence rate – so there will be no tax on those savings whatsoever. This zero-pence band will be almost doubled to cover the first £5,000 of saving income. This will benefit 1.5 million low income savers.
Additionally the Budget increased the amount you can put into a Child Trust Fund or Junior ISA to £4,000. This will help people who want to save for their children’s future.
Commenting Greg Hands said: “Savers have had a hard time in recent years and it’s time we helped them out. That’s why whether you want to save for a home, save for your family or save for your retirement, this is a Budget for you. These radical changes will help boost economic security for people who work hard and save hard – and show that the Conservative-led Government is on your side.”