Two developments announced by the Chancellor will have a significant impact for the UK financial services industry and underline the importance of financial advice.
First, Isas will be developed to meet the changing needs of savers. The Chancellor said he has concluded the review of Isas, which was promised when the regime was introduced in 1999.
The conclusion is that Isas have met their objective of extending the savings habit but that they want to build on this success.
As a result, the Chancellor proposes to make Isas a permanent feature of the savings landscape and also to make significant improvements.
The positive developments include guaranteeing an annual limit of “at least 7,000”, rolling Peps into the Isa wrapper and allowing transfers from cash Isas into stocks & shares Isas.
The first point suggests that there may be scope in future for contribution limits to be uprated in line with asset values.
Second, much to our disappointment, the Chancellor failed to heed feedback from advisers and announced a major change to the taxation of alternatively secured pensions. However, these changes, along with those from the March Budget, will create more opportunities for you to contact your clients to help them formulate effective tax and financial planning solutions.