The Budget and Savers

Some good news for savers, particularly those struggling with current low rates of interest. Individual Savings Accounts (ISA) Savers will be able to put up to £15,000 a year into an ISA but only from 1 July 2014. The New ISA (NISA) with a £15,000 limit is aimed to make thing simpler. You will be able use the full limit in cash, investments or a mix of both. You can still only open one Cash NISA and one Stocks & Shares NISA for new money each tax year. You can also open other NISAs to transfer old ISAs into. You will be able to transfer between Cash and Stocks & Shares NISAs. It is also expected that money saved via peer-to-peer lending firms will also qualify for a NISA. As this requires consultation, it’s likely to be 2017 before this option becomes available. The limit for Junior ISAs will be raised to £4,000. Pensioner Bonds These will be available for the over 65s from January 2015 via National Savings & Investments (NS&I). The interest rate will be 2.8% for one-year bonds and 4% for three-year bonds. The maximum investment into this scheme will be £10,000 for each bond. Interest on the bonds will be taxed in line with all other savings income at the individual’s personal tax rate. Premium Bonds The current cap will rise from £30,000 to £40,000 in June 2014 and then to £50,000 in 2015. The cap is the maximum that individuals can hold in premium bonds.