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.
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.
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.