Personal Savings

Individual Savings Accounts (ISAs)

The limits for ISAs will be changed with effect from 6 April 2008. Individuals will from that date be able to subscribe £3,600 per tax year to a cash ISA and up to £7,200 per tax year to a stocks and cash ISA, subject to an overall ISA annual subscription limit of £7,200. From the same date the distinction between a mini and maxi ISA will be removed. An individual will then be able to subscribe to a cash ISA, a stocks and shares ISA or to both.

In the 2006 Pre-Budget Report further proposals for reforms of ISAs were published. Draft regulations have now been published that will affect ISAs from April 2008. The proposed changes include the following:

• To allow PEPs within the ISAs wrapper by aligning the rules for the two schemes
• To allow Child Trust Fund accounts on maturity to rollover into ISAs
• To allow transfers from cash subscribed in previous tax years to the stocks and shares component of the ISAs without affecting the annual investment limit.

Alternatively secured pensions (ASPs)

The rules for members and dependents are to be amended to introduce a requirement on and after the 6 April 2007 to draw a minimum income from an ASP fund and a tax charge where ASP funds remaining on the death of a member are transferred to the pension funds of other members in the scheme. Measures will also address the problem of schemes which have not been able to trace members by age 75.