Chancellor of the Exchequer George Osborne provided a boost to British wealth managers and insurers by announcing plans in his budget to once again raise the tax-free allowance on individual saving accounts.
The limit will rise to 20,000 pounds a year from 15,000 pounds starting in April, 2017, Osborne said in his annual budget speech to the House of Commons. Firms that sell ISAs including St. James’s Place Plc, Standard Life Plc, Legal & General Group Plc and Hargreaves Lansdown Plc, all jumped in London trading.
“We know people like ISAs – because they are simple,” Osborne told lawmakers on Wednesday. “Faced with the truth that young people aren’t saving enough, I am today providing a different answer to the same problem.”
The government also announced plans to introduce a so-called Lifetime ISA product for anyone under the age of 40 starting next year. For every 4,000 pounds saved by an individual each year, the government will give them a 1,000 pound bonus until they turn 50. The cash saved can be used to buy a first home or for retirement.
“Today’s Budget has a major emphasis on long-term savings,” said Jonathan Lipkin, director of public policy at the Investment Association in London. “The rise in the ISA limit to 20,000 pounds is a great vote of confidence in the ISA brand and a further opportunity for people to save.”
Source: Bloomberg