Retail bonds set for take off as Treasury plots Isa rule change

Michael Bow
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THE BURGEONING retail bond sector could gain access to the £440bn Isa market after the Treasury announced plans to loosen rules around their inclusion in people’s saving accounts.

The government said it was exploring plans to help increase the number of retail bonds allowed to be included in ISAs by cutting the length of maturities. Currently only retail bonds which pay out after five years are permitted for inclusion but the Treasury wants to change this to allow funds with under five years maturities. It will launch a consultation next year exploring ways to boost retail participation in capital markets.

The Quoted Companies Alliance welcomed the proposal and said it could help SMEs “raise equity finance more efficiently and effectively”.

However, Osborne disappointed by failing to mention anything on whether he would allow parents to transfer their child trust funds (CTFs) into Junior Isas, which offer better value for money.