The UK stock market may have been largely unmoved by the Chancellor's well-trailered Autumn Statement but holders of Individual Savings Accounts (ISAs) will be pleased to see that assets can be kept in the wrapper and passed on to their spouses on their death.
“The increase in the annual ISA allowance and change to the tax treatment of ISA assets on death are both welcome additional developments for savers, on top of the pension freedoms which come into force in April 2015,” says Russ Mould, AJ Bell Investment Director. “However, it is not all good news. The cautious GDP growth forecasts offered by the Office of Budget Responsibility and Mr. Osborne's admission he will need to borrow more than expected to balance the books mean interest rates could well stay lower for longer than the market expects, further pressuring savers and placing a further emphasis on the search for a dependable yield from portfolios.”
Notes for Editors
- The annual allowance for an ISA will increase from £15,000 to £15,240, while the maximum annual contribution permitted for an Junior ISA will rise to £4,080 from £4,000.
- Since March's Budget, the Government has outlined a series of pension reforms which are to come into force from 6 April 2015. The shift in the tax treatment of ISAs upon death moves the wrappers closer to the new rules for pensions, although in the case of ISAs yesterday’s proposed changes rules only benefit spouses, not any beneficiary.
- Following October's announcement peer-to-peer (P2P) lending could be permitted in ISAs, the Chancellor launched a consultation on whether ISA eligibility should be granted to crowd-funded, debt-based investments.