Investors will be free to move their money to better-paying Isas under plans by the Chancellor to ignite a savings rates war.
Savers are currently restricted to opening and putting money in just one type of Isa a year – meaning they can be left stuck with a lower rate if better deals become available.
However, Treasury ministers are considering plans ahead of this month’s Autumn Statement that will allow savers to open multiple Isas in a single tax year without losing their £20,000 allowance.
It is hoped that the shakeup will encourage providers to offer more competitive rates, and allow savers to make hundreds of pounds more in tax-free interest every year.
It is understood that Jeremy Hunt has abandoned plans to give savers an extra £5,000 Isa allowance to invest in British stocks, and has decided against scrapping the unpopular Innovative Finance Isa, a vehicle for high-risk investments.
In a snub to consumer champion Martin Lewis, who called for Isa reforms to help first-time homebuyers this week, it is understood Mr Hunt does not plan to lift the Lifetime Isa limit or scrap the penalty charge for savers who breach it.
Mr Hunt is set to table a consultation into wider Isa reforms later this month. Individual Savings Accounts (Isas) allow savers to put away up to £20,000 in a year without having to pay any tax on interest or returns. Savers can choose to invest in funds or stocks or receive a simple cash savings rate from a provider.
Under current rules, if you hold more than one type of Isa you can spread your allowance between them. What you cannot do currently is make payments into more than one stocks and shares or cash Isa in the same tax year.
You can, however, ask a provider to move the savings to another Isa without losing tax-free status, but this is often time-consuming and many savers open and maintain their own Isas or are not aware this is allowed.
Mr Hunt’s plans to allow savers to open and move savings to multiple Isas each year will allow account holders to shop for better savings deals while keeping their savings tax-free if it’s within the allowance.
Baroness Ros Altmann, a former pensions minister, said: “It is really important that Isa investors have freedom to mix and match their assets so they can invest as they think best.
“It should not be that they have to choose between a whole array of different Isas, so removing as many restrictions as possible makes sense.”
Treasury ministers have been meeting with industry stakeholders to discuss Isa reforms for the past six months.
Tom Selby, of the broker AJ Bell, said: “The rule preventing Isa savers subscribing to more than one version of each type of Isa never made much sense. Ditching this rule removes one of the key blockers to more fundamental reform and would be an extremely welcome step in the right direction.
“Coupled with reforms designed to boost the financial help available to millions of Britons, this could create the foundations of an investing revolution in the UK.
“Given most investors display a significant ‘home bias’ when choosing their investments, that revolution should, in turn, help drive more capital to British businesses.”
The Government and the Financial Conduct Authority have criticised banks this year for not passing on rate hikes to savers, but lenders have been offering better deals to savers since then, with easy-access rates at 5.2pc and one-year deals at around 6pc.
Savings rate rises follow the Bank of England’s rate of 5.25pc, which it held earlier this month.
Sources close to the discussions said that ministers are wary of implementing too many changes to the Isa regime before the next tax year starts in April.
In June, the economic secretary to the Treasury and City minister, Andrew Griffith, highlighted plans to incentivise Isa saving, as well as a goal of providing “high-quality, affordable and suitable financial advice”.
He said: “Our aim is to make [Isas] simpler and more attractive with strength and incentive to save and invest”.
A Treasury spokesman said it was receptive to ideas of how it can make Isas more attractive to encourage people to develop a savings habit and “invest in a way that works for them”.
https://news.google.com/rss/articles/CBMiYGh0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9tb25leS9pbnZlc3RpbmcvaXNhcy9zYXZlcnMtY2FzaC1pbi1qZXJlbXktaHVudC1wbG90cy1pc2EtcmF0ZXMtd2FyL9IBAA?oc=5
2023-11-08 18:00:00Z
2589434628
Tidak ada komentar:
Posting Komentar