ISAs here for keeps

ISAs Individual Savings Accounts are to become a permanent feature of the savings and investment landscape, following remarks by Treasury Minister, Ed Balls, at the PIMA PEP and ISA Managers' Association Annual Meeting.

Introduced back in 1999 for an initial 10-year period, Balls also confirmed that ISAs will retain their £7,000 annual investment limit and fall in price due to streamlining measures.

Balls said that it's the Government's intention to remove the mini/maxi distinction within the ISA - as many in the savings industry have requested. This will simplify the regime, removing barriers to saving by making it easier for savers to 'understand and engage' with ISAs. And it will provide greater flexibility and choice for savers.

He added that the Government will be bringing PEP Personal Equity Plans schemes within the ISA wrapper. In addition, child trust fund accounts will be allowed to roll over into ISAs on maturity.

Beyond these reforms, Balls said the Government doesn't believe there is a gap in the market for a new savings vehicle for all.

"There are already a wide range of savings products available that allow individuals to cater for their savings needs during their working life, and tax simplification rules introduced in April 2006 mean there is now flexibility for individuals to roll their savings into their pensions, and benefit from tax relief, if they so choose," he said.

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2006-11-02 10:55:28 © Moneyextra.com