ISA changes to cost Government millions - Savings - News - Moneyfacts

News

ISA changes to cost Government millions

ISA changes to cost Government millions

Category: Savings

Updated: 05/10/2009
First Published: 05/10/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Government has estimated it will give away an additional £85 million over the next few years as a result of the higher limits it has introduced for ISAs.

These new limits, as introduced by Alastair Darling in his April Budget, will see a £3,000 increase in annual ISA allowance.

Savers born before 6 April 1960 will be able to top up this year's allowance from tomorrow, while everybody else will have to wait until the beginning of the next financial year in April 2010.

Almost all banks and building societies have said they will allow top-ups, although some only for a limited period of time. However, savers are advised to check specific details with their provider.

According to Government estimates, it is to forgoe £2 billion from ISAs, as it normally collects tax from investments and savings.

"Two billion is a lot of money and it shows just how much money people who use ISAs are already saving. It's great to think that all that money is going back into the investor's pocket, rather than the taxman's," commented Paul Kennedy, director of tax wrapper and trust planning at Fidelity International.

"It's really important to understand that an ISA is not about taking more risk with your money and it's not about taking less risk. It's simply about understanding that wherever you chose to save or invest, the taxman normally takes part of your investment return.

"With an ISA he does not and you'll get more back. If you have savings or investments and don't use an ISA, you're going to miss out on your share of this great giveaway."

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savings being used as a festive financial buffer

Good news from RCI Bank UK – its latest research shows that many of us are saving more than we were a year ago, but the question is, will you be dipping into that buffer to cover the cost of Christmas?

6 of the best easy access savings accounts

Easy-access savings accounts are as simple as they sound – they allow you to access your money whenever you need it, without having to give advance notice, and they also allow you to pay into them at any time. Here are six of the best.

Start saving for Christmas… 2017!

Christmas is just around the corner and our annual festive splurging is starting to step up, but are you prepared? It may be too late to start saving for this year’s festive spend, but it’s never too early to start for next year’s!
 
Close