View more on these topics

Cutting Isa allowances will cost savers over £180,000′

Government plans to cut Isa allowances from April 2005 could cost regular Isa savers over £180,000 in tax-free interest over the course of their working lives, says Intelligent Finance.

IF is concerned that Chancellor Gordon Brown’s decision to cut the mini cash Isa allowance from £3,000 to £1,000 next year will hit savers at a time when the savings gap and personal debt are at record highs.

The firm’s research shows that more than 1.1 million investors from low to middle-income groups saved over £1,000 in an Isa in the last tax year.

Based on IF’s interest rate of 5.1 per cent, a person investing £3,000 a year into a mini-cash Isa over 20 years would earn an extra £30,000 of tax-free income, rising to £80,000 in lost tax-free interest over 30 years and £180,000 over 40 years.


Correspondent’s Week

As most personal finance journalists – well, most of the female ones anyway – were invited to a screening of Bridget Jones: The Edge of Reason last week, I felt it fitting to write my column in something approxim-ating the style of Bridget’s first diary.


Guide: day-to-day tasks ​— can your system manage?

This guide from Johnson Fleming will take you through the required communication and also give ideas for additional actions that will ensure your auto-enrolment project is a success. As well as highlighting what is required from a system to ensure it is up to the tasks, an overview of the following is also provided: data validation; data categorisation; employee communication; opt-in process; opt-out process; produce contribution schedule; contribution reconciliation process; upload of member data to pension provider; upload contribution to pension provider; manage salary sacrifice process; enrolment process; re-enrolment process; and management of increased employee queries.


News and expert analysis straight to your inbox

Sign up


    Leave a comment