PRE-BUDGET RESPONSE
The PEP and ISA Managers’ Association today warmly welcomed the Chancellor’s acknowledgment in his Pre-Budget Statement that ISAs are the Government’s primary vehicle for tax-free saving outside pensions. The report detailed that over 15 million people – around one in three adults – now have an ISA and approximately one in five are from lower income groups. Over £120 billion has been subscribed to ISAs since their launch in 1999.
PIMA also welcomes the Chancellor’s confirmation to wrap all Sandler medium-term and life assurance products into the stocks and shares ISA. Tony Vine-Lott, Director General said: “This is just the kind of simplification we have been calling for and are pleased to see the Chancellor has decided to move this forward”
PIMA however are concerned that the Chancellor has given no clarification to consumers and providers on the future ‘tax-free’ status of stocks and shares ISAs. PIMA urge the Government to clarify this situation sooner rather than later.
This call follows the Chancellor’s decision to proceed with the abolition of the 10% tax credit dividend on stocks and shares ISAs from April 2004.
Tony Vine-Lott, said: “We are very pleased with the Chancellor’s comments on ISAs in the Pre-Budget Statement. PIMA has always maintained that the ISA is a successful savings vehicle and this is demonstrated in the figures released today in the Government’s report.
However, we are extremely disappointed that the Chancellor has decided not to take this opportunity to think again about his decision to scrap the tax credit on stocks and shares ISAs. We urge the Treasury to give consumers and providers urgent guidance on the definition of ‘tax free’ status. FSA guidance indicates that stocks and shares ISAs may no longer be called ‘tax free’. Consumers need to understand just what they are buying.”
For more information and comment:
Tony Vine-Lott – PIMA 01372 374728
07790 006108
Sally Pagonakis – Cicero Consulting 020 7665 9533