There were a number of changes to promote savings in the Budget. 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.