Savings boost

April 10th 2015

There were a number of changes to promote savings in the Budget including details of the Help to Buy ISA. The main changes are set out below:

Help to Buy ISA

From autumn 2015, a new ISA is being launched that will enable first time buyers to save for their deposit. An initial deposit of £1,000 is allowed with additional monthly savings of up to £200.

The Government will top up these savings by 25% up to a maximum of £3,000 (when deposits by the saver reach £12,000).

The bonus can only be put towards a first time buy of up to £450,000 in London or £250,000 elsewhere.

ISA flexibility

From autumn 2015, ISA savers will be able to withdraw and replace money from their ISAs without using up their ISA subscription limit.

Personal savings allowance

From April 2016, basic rate taxpayers will not have to pay tax on the first £1,000 of interest received on savings, and higher rate (40%) taxpayers will not have to pay tax on the first £500 of interest received. The allowance will not be available to additional rate (45%) income taxpayers.

Premium Bonds investment limit

This limit is increased from £30,000 to £50,000 on 1 June 2015.

Please feel free to contact DSC Chartered Accountants in Harrogate if you would like to discuss this article in more depth.