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Isa investors boosted with £7,000 extension

Thousands of investors could be hundreds of pounds better off thanks to the Chancellor&#39s decision to maintain the £7,000 Isa limit for another year.

But while fund managers and IFAs welcome the news, some are frustrated they were not made aware of the changes

sooner, having already prepared and received Isa applications

for next year.

The £7,000 limit was to be reduced to £5,000 next year but Gordon Brown has decided to defer the reduction to encourage people to save.

A £2,000 investment in the average technology fund a year ago would have landed an investor an extra £3,624, while the average Europe and UK

Isa would have climbed by £997

and £354 respectively.

The £3,000 cash and £1,000 insurance limits also remain intact for at least one more year.

IFAs are being warned to act quickly so banks and building societies do not get the headstart on sales again. Some 70 per cent of Isa sales came through salesforces in April last year, with many being mini cash Isas.

But there was disappointment that Brown did not take any steps to amend the mini and maxi Isa rules and to bring Pep rules into line with Isas. The Government will discuss these issues with the industry later

in the year.

Jupiter sales and marketing director Steve Glynn says: &#34It is frustrating that they have let us know so close to the end of the tax year. It is a problem.&#34

Best Investments deputy managing director Jason Hollands says: &#34To do this just days before the end of the tax year shows just how vague Government thinking is. Policy seems to be made on a whim.&#34

Fidelity senior marketing manager Dave Cowdell says: &#34IFAs will need to be aware of the continued threat posed by banks and building societies.&#34

l Budget Comment and News, p2,3,5;

On-line analysis at www.


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