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Those of more modest means must have been wondering what all the Budget fuss was about. Whilst hugely exciting for some, the media hype following George Osborne’s introduction of the New ISA (or NISA), to be rolled out in July, didn’t necessarily speak to everyone in quite the same way.
Unlike most of the Budgets I have endured and enjoyed, this one was the most surprising – no one in the financial services industry saw this coming, and even more amazingly none of what the Chancellor announced was leaked in advance. But with such a short lead time until 1 July is upon us, it’s going to be a busy few months.
However, now the dust has settled, it’s time to take stock. Much of the excitement centres around the fact that the Chancellor has increased the new ISA limit to £15,000 a year as well as ensuring that people can use the full limit for either cash, investments or a mix of both.
In reality, though, how many of us are going to be able to take full advantage of these changes? Of course, the increase in the ISA investment allowance to £15,000 from July will be welcome news for the wealthy, but few are fortunate enough to have this level of investment they can put aside.
We need to get real. We need to start reaching out to ordinary savers and investors and, probably more importantly, potential savers and investors and encourage them to get into a good saving habit, no matter how small. A number of people will have assumed that ISAs are not for them on the basis that they are not able to save anything like £15,000 per year. That just isn’t the case.
The rules about how much you can have in a cash ISA and how much in a stocks and shares ISA have been simplified. This simplification is also something that people of all incomes can take advantage of, not just the affluent.
In my view, if we can focus more on how the new ISA will benefit middle and lower income investors and savers, we can perhaps make headway on making Britain a nation of savers. The way to do that is to reach out to these people and let them know that saving – any saving – is a good habit to get into. Just putting a small amount away each month is a good start. You don’t have to be a millionaire to take advantage of the NISA.
No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting www.unbiased.co.uk. Advisers may charge for providing such advice and should confirm any cost beforehand.