The New Isa (Nisa) introduced today by chancellor George Osborne has been hailed as creating a “formidable tool for savers”.
From July 1, the Nisa will have an annual limit of £15,000 and investors will be able to fill their Nisa accounts with either cash or stocks and shares, simplifying the scheme.
Darius McDermott, managing director of Chelsea Financial Services, said Isa tweaks in previous budgets had “generally been disadvantageous” but he said this year reversed that trend and “the ISA has become a formidable tool for savers and investors”.
Mr McDermott said the ability to freely switch between cash and stocks in the Nisa “will be able to increase and decrease the risk at crucial times”.
The Government has also expanded the range of products that can be included in an Isa, allowing peer to peer (P2P) lending instruments for the first time and products of all maturities.
Stephen Ford, Head of Investment Management at Brewin Dolphin, said the changes have “removed the ‘nanny knows best’ aspect of the Isa”, with the “far broader range of products” and ability to switch between cash and investment products at will.
“The Isa is now a far sharper tool in the tax planning toolkit,” he said.
Tony Stenning, head of UK retail at BlackRock, said the changes to the Isa system will benefit a huge number of people because BlackRock’s research had found that 40 per cent of Britons save or invest in Isas