There's more big news for savers from the Budget. The government’s dramatically increasing the flexibility of Isas.
It’s merging cash and stocks Isas into one product, allowing transfers from shares into cash. It's also raising the annual limit to £15,000, rising from £11,520.
Junior Isas will be raised to £4,000.
Richard Fearon, head of Halifax Savings think the announcements on changes to Isas will be far reaching and offer more freedom to people financially.
People will be able to choose how much of their allowance to have in cash, and how much in stocks and shares, while being able to move funds freely between the two. This addresses a key issue – our research shows that four out of five people currently saving in an ISA only use the cash component, so they are effectively not using half of their allowance. Under these new rules savers now have the flexibility they need to make use of the full, expanded ISA allowance, saving up to £15,000 a year.
The increase in the limit will benefit all income groups, not just the well off, as our research shows that half the people currently saving the full cash Isa allowance are on incomes of less than £20,000.
Around one in three people see their ISA as a form of pension – for them, these changes can only help them build a bigger retirement pot.
We estimate this announcement will help the 1.5 million people who are saving every penny into their ISAs as a deposit on their first homes. Giving them a greater allowance will further support them in getting on to the property ladder.