George Osborne’s statement provided little in the way of good news for savers, with a number of anticipated initiatives failing to make an appearance.
Many in the savings industry had expected the Chancellor to announce that the rules which prevent six million children transferring savings from child trust funds into junior ISAs would be scrapped, following the completion of a government consultation.
Danny Cox, head of financial planning at Hargreaves Lansdown, said: “The consultation ended in August and without a change in the rules to allow transfers from CTFs to Junior ISAs, over six million children with CTFs risk being disadvantaged. The Child Trust Fund (CTF) is in terminal decline with many providers offering lower rates and worse choice than is available from Junior ISA and the government needs to recognise this.”
Darius McDermott, managing director at Chelsea Financial Services, agreed: "I don't see why a child's date of birth should stop them getting the best deals. It seems incredibly unfair and the Chancellor has missed an opportunity to finally sort the mess out.”
He added: "The government asked for feedback, which they received back in August, and I don't really see why they couldn't make a decision in that time, especially when it's such a no-brainer: Junior ISAs offer more choice, lower costs and better cash rates. Let's hope they see sense before the March Budget."
There was also speculation that the government would allow peer to peer lending to be held within an ISA for the first time. Daniel Rajkumar, managing director of rebuildingsociety.com, said that this would have complemented the government’s current focus on business lending and encouraged “a new wave of P2P investors” and help create “a thriving SME sector in the UK”.
Contribution levels for ISAs and JISAs will rise, as anticipated, in line with the consumer prices index (CPI). In 2014/15 savers will be able to put £11,880 into an ISA of which £5,940 can be in cash ISAs. Allowances for junior ISAs and child trust funds will rise to £3,840.
Graham Beale, chief executive of the Nationwide Building Society, also said that he was disappointed that Osborne had not take the opportunity to equalize investment limits for cash and equity ISAs.
“This is a missed opportunity for the Chancellor to demonstrate support for savers by simplifying ISAs. The disparity between cash and equity ISA limits is a long standing anomaly that not only feels unfair for those who prefer to put their savings into a cash ISA, but also leads to widespread confusion around how savers can maximise their tax-efficient ISA allowance.”
The society is also calling for the government to permit transfers from equity ISAs into cash.