Budget 2014: £15,000 Isa boost for Britain's savers

Chancellor George Osborne unveiled a Budget boost for Britain's Isa savers by announcing they can save up to £15,000 a year tax-free in a "New Isa".

In a huge reform designed to encourage Brits to save more money, stocks and shares Isas and cash Isas will be merged to create a new simplified account.

Until now, people have been forced to split their tax-free savings between the two types of Isa, with the limit for stocks and shares Isas set at £11,520 in the current tax year and the maximum for cash Isas set at £5,760.

But from 1 July 2014 that limit will rise to £15,000 in the new single Isa, with savers permitted to hold the full amount in cash, stocks and shares, or a combination of the two.

In another significant change, savers will also be able to transfer their funds from a stocks and shares Isa to a cash Isa for the very first time.

The move has been welcomed by industry experts and consumer groups.

Rebecca O'Keefe, head of investment at Interactive Investor, said: "The New Isa regime comes with a new name, increased allowances and greater flexibility – this is fantastic news for savers and investors.

"Increasing the flexibility on investment choices and allowing investors to choose whether they want to save or invest is a major enhancement for all those looking to provide for their future."

Nationwide chief executive Graham Beale added: "[This] is great news for Britain's savers. We have been campaigning for this to happen for many years now and I am delighted the chancellor has responded to our calls.

"The impact this will have on people looking for ways to make the most of their savings will be huge with people now able to put in £15,000 a year with much greater flexibility.

"It will reduce confusion on the differing amounts which could be saved in cash and stocks and shares and more importantly give people more flexibility to earn tax-free interest."

The government also announced it will also raise the maximum amount savers can invest in a Junior Isa (Jisa) or Child Trust Fund from £3,720 to £4,000 on 1 July.

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New ISA limiits
It is pleasing that we now have a choice where to place our savings in IAS's
Moneywise campaigned last year for this to happen. an added 'bonus' also with the limit being raised to £15,000
Well done Moneywise. It will now be easier to reach that millionaire status !!!

Confused - The government also announced it will also raise the maximum amount savers can invest in a Junior Isa (Jisa) or Child Trust Fund from £3,720 to £4,000 on 1 July - but 2104/15 CFT and Jisa limit increases to £3,840 on 6th April 2015 so which is the correct figure? Is it £3720 from 6th April 13 - 1st July 14 and then £4,000 from 1st July 14 - 5th Apr 15??? Or is this mis-reported? Thanks

By the way I have contributed the full amount to ISA's since they started and am nowhere near having £1m are you having us on in retrospect!

The rise in the CTF and Jisa allowance will indeed come into effect on 1 July 2014. Between 6 April and 1 july, you will be able to pay in up to the previously announced increased maximum allowance for the 2014/15 financial year, which had been set at £3,840. So when the new rules come into force on 1 July, you will be able to put in another £160 to take you to the £4,000 total. 

I intend to invest £5760 in a 5 year fixed rate cash ISA on 6 April 2014.  I am aware that the cash ISA limit is increasing to £15000 on 1 July 2014.  May I therefore open a different cash ISA on 1 July 2014 and invest £9240?  It is great news that the ISA allowance is increasing, and I would like to take advantage of this by investing my complete allowance.  I do not wish to invest in a Stocks and Shares ISA and do not want to lose out by holding on until 1 July 2014 to open a cash ISA this financial year.  Please would you advise or clarify the rules for investing?  Thank you.

Between 6 April and the end of June, ISA savers can deposit up to £5,940 in a cash Isa and £11,880 in a stocks and shares Isa.

From 1 July, 2014/15 Isas effectively become one merged account - called a 'New Isa or Nisa' and can be topped up to £15,000.

So someone depositing £5,940 between 6 April and the end of June would be allowed to top up their account - which will automatically become a Nisa - by £9,060 from 1 July. The Skipton Building Society will give savers doing this during the month of July the same fixed rate as the rest of their 2014/15 cash ISA.