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Budget 2014: ISAs dramatically overhauled as annual rate rises to £15k

Budget 2014: ISAs dramatically overhauled as annual rate rises to £15k

Chancellor George Osborne has confirmed that the individual savings account (ISA) regime will be restructured.

From 1 July, the distinction between cash and stocks and shares ISAs will be scrapped. Instead a single ISA will come into force, and its annual limit will also be increased to £15,000.

'I want to help savers by dramatically increasing the simplicity, flexibility and generosity of ISAs,' said Osborne. '24 million people in this country have an ISA, and yet millions of them would like to save more than the annual limits of around £5,500 on cash ISAs and £11,500 on stocks and shares ISAs.'

The Treasury estimated that this would reduce its tax take by up to £565 million by 2018-19, with a cost of £5 million next financial year and £80 million in 2015-16.

Osborne confirmed that any transfers between ISAs would be permitted too. 'We will make them more flexible by allowing savers to transfer all of the ISAs they already have from stocks and shares into cash, or the other way around,' he explained.

The cap on junior ISAs will rise to £4,000, from £3,720, as well.

A final change has made peer-to-peer loans ISA eligible now, while all restrictions around the maturity dates of securities held within ISAs will be removed.

The government revealed that it was also exploring extending the ISA regime to include debt securities offered by crowdfunding platforms.

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