Gordon Brown’s pre-election Budget resembled the machinations of a medieval court, with the Chancellor handing out largesse to a variety of voter groups. For first-time buyers, there was a rise in the threshold level for stamp duty. Low-income families got an increase in child tax credits and for pensioners, there was an increase in the pension credit and a £200 council tax refund (only guaranteed for this – election – year, mind you). There was, however, precious little of substance to encourage people to save more for the long term despite the low level savings ratio which has slumped from 9.9 per cent before the current Government was elected to a paltry 5.6 per cent today.True, the announcement that the £7,000 Isa allow-ance would be extended until 2010 was a welcome reprieve of sorts. However, before lavishing praise on the Chancellor, the industry should remind itself that the £7,000 Isa is still well below the combination of Pep and Tessa tax-free havens which Brown abolished to make way for Isas. Of course, many other tax allowances are reviewed annually. Invariably they are reviewed upwards and never downwards. However, the Isa allowance has been stuck at £7,000 since its inception. The Chancellor would have done much to restore confidence in Isas had he announced an increase in the allowance rather than merely an extension of its time on the equivalent of “financial product death row”. There was also a vague – not firm – boost to child trust funds in that the Chancellor announced the Government would consult on possible further vouchers to be paid into the accounts at secondary school age. The Government already has one such exercise in progress in that it is considering a £250 CTF topup when the child is aged seven. Of course, all that is definitely on the table this side of the likely May general election is the £250 at birth (rising to £500 for the offspring of low income families). A tripling of the vouchers will go some way to making the accrued allowance more meaningful but only if parents choose equity-based investments, not the deposit accounts that many are being lured into opening by high-street banks offering cuddly toys and piggybanks. There were, however, some positive technical changes to Isas and CTFs buried in the Budget, details of which most MPs in the House of Commons are probably oblivious. In particular, the ann-ouncement that all FSA-regulated and authorised retail investment funds will be eligible from April 2006 effectively brings property funds in from the cold. This is something that F&C has long campaigned for, having written to the Treasury in the past and got wishy-washy noises about keeping an open mind. Commercial property is the missing ingredient in many investors’ portfolios. It is attractive for its yield characteristics and as a means of diversifying a portfolio away from equities and bonds. Importantly, property is also an asset class that does seem to still resonate with the equity-Isa shunning public. There have been relatively few launches of new investment products over the past year, with the exception of property-based schemes, which have been eagerly snapped up. The Budget had little to offer in the way of concrete details of what UK real est-ate investment trusts will look like, just further consultation. It seems unlikely that the products will be up and running any time soon and, given the Chancellor’s rationale that they are a tool for reducing house price inflation, it would be odd for the scheme not to have a focus on residential property as opposed to commercial property. There was also a watering down of proposals which could result in the withdrawal of tax privileges from funds where an investor has more than a 10 per cent stake in a fund. Some commentators feared this could impact multi-managers or the ability of fund companies to seed new products. Under new proposals, certain types of investor, such as connected parties and pension funds, are excluded and a more flexible line appears to have been adopted following effective lobbying by the IMA. The focus was on short-term handouts rather than long-term incentives to save. Over the coming weeks, politicians of all parties must be questioned about how they intend to encourage the public to save. The politicians are turning up the volume on tax, with many economists forecasting rises after the election. This is exactly the sort of environment when the public should be utilising allowances like Isas and pensions. IFAs must get this message across by the end of the tax year. Jason Hollands is director (head of communications)at F&C Asset Management of which most MPs in the House of Commons are probably oblivious.