Commenting on measures announced in this afternoon’s Budget to combat the cost of living, Kevin Brown, savings specialist at Scottish Friendly, says:

“Measures to ease the cost of living should be welcomed if they offer breathing space for households facing another difficult winter. But while the £100 energy payment for households in council tax bands A–D in England will help with immediate bills, that support may only go so far.

“Fundamentally, the Chancellor cannot remove the global pressures driving up inflation. As long as the conflict in the Middle East continues to disrupt energy supplies, the risk of further price rises, and therefore potentially interest rates remains.

“That makes building financial resilience all the more important. For households with money they can afford to put away for the longer term, investing could provide individuals with a better chance for greater returns.

Brown continues:

“Against that backdrop, the proposed starter investment ISA deserves serious consideration.

"While we are disappointed the Government has not proceeded with reforms to reduce the Cash ISA limit, the proposed starter ISA is a welcome step towards building a stronger investing culture in the UK. If designed well, it could help encourage first-time investors to take their first steps into long-term investing, with the potential of improving financial outcomes for UK households in addition to supporting economic growth."

“The consultation must now establish how this would work in practice. A simple, accessible product could help beginners, especially if it’s backed by clear guidance on investment risk, potential for returns, and the importance of taking a long-term view.

“Today’s cost-of-living support may offer some relief through the winter. But we’re more optimistic about the potential of the Government’s proposed starter investment ISA to help more people build financial resilience for the years ahead, provided it gets the detail right.”