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Isas are here to stay

Balls says distinction between maxi and mini will be removed and hints that the investment limit may be raised

Treasury Economic Secretary Ed Balls has ended speculation about the future of Isas by announcing that they will retained permanently.

Speaking at the Pep & Isa Managers’ Association conference in London last week, Balls said the Government was pledging to retain- ing Isas.

There had been specu- lation as the Government’s current commitment to Isas ends in 2010.

Balls said that the dist- inction between maxi and mini Isas will be scrapped to make savings easier to understand and to give greater flexibility.

He added that this measure will make Isas cheaper and easier for the industry to provide and the pre-Budget report will give further details on the move.

Balls also hinted that an increase to the overall maximum investment level of £7,000 a year could be announced in the pre-Budget report.

However, he rejected calls for some kind of lifetime savings vehicle of the type proposed by the Conservatives before the last general election although he said that child trust funds will be allowed to roll into Isas when a child rea- ches the age of 18.

Balls said: “Our task is to entrench a culture of savings for people of all ages. Today’s announcements – the big- gest-ever reform to the Isa regime – will simplify pers- onal savings and help more families to save for the future to deliver our objective of ensuring everyone can share in rising prosperity.”

Pima director general Tony Vine-Lott says: “The commitment to Isas beyond 2010 and the removal of the mini/ maxi distinction are key issues which Pima has lobbied for as part our input to the Isa review. We are absolutely delighted that the Treasury has taken on board these recommendations.”

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