A major shake-up of the Isa regime has been announced by the Economic secretary to the Treasury Ed Balls.
The Government revealed at the Pima conference in London today that Isas will remain permanently, as the previous commitment would have only seen them in place until 2010.
The £7,000 investment cap will remain, and Balls hinted that an increase could be announced in the pre-Budget report.
The main changes will see personal equity plans fall within the Isa wrapper, with PEPs continuing to enjoy tax-advantages.
There will also be the removal of the maxi/mini distinction to simplify the regime, while child trust fund accounts will roll-over to Isas on maturity.
Balls says: “Our task is to entrench a culture of savings for people of all ages. Today’s announcements, the largest ever reform to the ISA regime, will simplify personal savings and help more families to save for the future to deliver our objective of ensuring everyone can share in rising prosperity.
“The review proposals will increase certainty about the future of ISAs, simplify the regime and provide greater flexibility and choice for savers.”
Pima director general Tony Vine-Lott says: “We are delighted that Ed Balls, used the Pima annual conference to announce this reform package.
“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. We look forward to more announcements on the Isa in the pre-budget report.”