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Pre-budget – Isa extension not far enough

Trade bodies and IFAs have welcomed the Government’s plan to extend Isa limits until 2009 but want further measures to increase savings.

In his pre-budget announcement Gordon Brown has agreed to consult on extending the existing 7,000 tax-free Isa limit for another five years, to 2009.

While everyone has welcomed the move, a number of groups want the reduction in Isa limits to be scrapped altogether.
Director of IFA PSFM John Hamilton-Hunt thought that the chancellor should have gone further.

While the Association of Investment Trust Companies and the Building Societies Association through that more work needed doing on Isas.

Hamilton-Hunt says: “The government should have taken the opportunity to introduce long-term incentives to save with a retirement Isa in which savers could set aside 7000 each year in a tax advantaged vehicle.”

AITC director general Daniel Godfrey says: “The Government still needs to provide sufficient support and resources to financial education.”

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