UK Announces Changes To ISAs, Annuities

By Editorial 24 March, 2014

The United Kingdom has unveiled a number of new measures affecting savers, including changes to the rules on Individual Savings Accounts (ISAs) and defined contribution schemes.

Chancellor of the Exchequer George Osborne announced in his budget speech on March 19, 2014, that cash ISAs and stocks and shares ISAs will be merged to create a single New ISA. Savers will be able to transfer all of the ISAs they already have from stocks and shares into cash, or vice versa.

As of July 1, 2014, the ISA investment limit will be lifted to GBP15,000 (USD24,760). Currently investment in cash ISAs and stocks and shares ISAs is capped at GBP5,500 and GBP11,500, respectively. The limit for Junior ISAs will be increased to GBP4,000.

Mr Osborne also revealed that those paying into defined contribution schemes will no longer be required to invest in low-yielding annuities.

"Most people still have little option but to take out an annuity, even though annuity rates have fallen by a half over the last 15 years," the chancellor said. "The tax rules around these pensions are a manifestation of a patronizing view that pensioners can't be trusted with their own pension pots. I reject that. People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances."

Tags: Finance | Tax | Investment | Pensions | Budget | United Kingdom | Expats | Pensions | Personal Finance | Pensions |


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