The Government has set its Isa reforms in stone laying out regulations to ensure greater flexibility and long-term stability for the product.
Economic secretary to the Treasury Kitty Ussher today laid regulations to make Isas available indefinitely, allow Peps to automatically become stocks and shares Isas and allow savers to transfer money saved in cash Isas to shares Isas. The new regulations also remove the mini/maxi destinction.
From April 2008 every adult will have an annual Isa limit of £7,200, of which £3,600 can be saved as cash.
Ussher says: “The Isa has been successful in helping more people to save in a tax-efficient way. Over 17 million people now invest in an Isa, more than double the number who ever held a Tessa or Pep. These reforms – to come into effect in April next year – will build on the success of Isas, making them even more attractive by allowing people to save more, and by being more flexible and simpler to use.”
IMA chief executive Richard Saunders says: “We would strongly urge all investors to use Isas as building blocks for their savings. For those investors who have built up cash Isas over the years it is worth considering making use of the new option to transfer some or all of this cash into stocks and shares Isas.”
Tisa director general Tony Vine-Lott says: ‘The enactment of the Isa reforms will lead to better outcomes for consumers as a result of a major lobbying win by Tisa and its members. These changes will make it even easier for savers to prepare for the future throughout their life. Coming off a record year for Isas, we anticipate the momentum to save via the Government’s flagship vehicle to continue and gather pace well into the future.”