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March 7, 2001

PIMA welcomes the Chancellor’s confirmation of the changes to the PEP & ISA rules originally announced in the pre-Budget statement last November.

John Brasington, PIMA’s Chairman, said “We are delighted that the Chancellor has underlined this government’s long-term commitment to the ISA by extending the current limits for a further five years to April 2006. This, together with allowing 16 & 17 year olds to subscribe to a cash ISA and the simplification of the PEP rules, will further encourage long term saving. On behalf of its members, PIMA has lobbied consistently for these changes and is delighted to see them confirmed.

We believe there are still further opportunities to improve the attractiveness of ISAs and encourage low and basic rate taxpayers to save for the long term. These opportunities, which PIMA will be pursuing with the Treasury and Inland Revenue, include:

*initiatives to encourage continued saving through PEPs & ISAs, following the removal of the tax credit in 2004,

*allowing flexibility for investors to transfer funds between components (e.g. cash to stocks & shares),

*allowing TESSA maturity capital to be rolled-over and split, at the choice of the investor, between all the various components (i.e: not restricted to cash), and

*simplification of the “maxi” and “mini” subscription rules.”