Every green option but savings changes will hit home more

23 April 2009 0:33 am

The Chancellor brought through every green and ethical option he could. All very worthy of a government in a finan- cially precarious position.

But his changes to tax-efficient savings will have more of an impact on most people.

He announced much increased Isa limits. For the 2009/ 2010 tax year, those aged over 50 can now invest £10,200 instead of £7,200 and from the next tax year, everyone else can. Half of this amount - £5,100 - can be held in cash.

This is the first time there will be an age banding on any tax-efficient investment but it adds an extra layer of complexity for Isa providers. Who will check the date of birth of the applicant? The providers? If mistakes are made, will the Isa become void?

Those under 50 may be tempted to fund the annual Isa for parents or grandparents or anyone over 50 to gain the extra tax- efficient growth.

For those who have learnt their financial services trade, they will know that it is a basis of all financial planning theory that wealth trickles down the generations - not up.

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