All existing ISAs will become NISAs and account holders will benefit from new flexibility in relation to their accounts, as well as an increased overall subscription limit of £15,000.
NISA savings can be held in cash or stocks and shares in any combination that the saver wishes. The Government is changing the name to reflect the significantly increased limits and flexibility associated with the NISA.
The Association of Taxation Technicians (ATT) welcomed the announcement saying that it will increase the value and simplicity of ISAs and provide significant incentive for those who save their money.
An increased subscription limit of £15,000 will apply from July 1, 2014, and investors will have the choice of whether to invest this amount in either cash or stocks and shares, or indeed a combination of both. The old limits on how much can be invested in each element are set to disappear. This will make the ISA a more flexible choice of tax free savings for many.
President of the ATT, Yvette Nunn, said: “These measures are welcomed by the ATT, as it provides an incentive for individuals to save over their lifetime and also signals a much needed boost for savers who have seen very little in the way of benefit over the last few years.
“The ability to transfer ISA savings out of stocks and shares and into cash ISAs, without losing the tax free status, will be particularly helpful in allowing individuals the flexibility to manage their savings, especially in circumstances where older savers are coming up to retirement. I urge the Government to keep in mind the critical importance of simplicity and not over-complicate the new ISA.”
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Susie Hughes © Shout99 2014