Chancellor George Osborne has announced plans in his pre-Election budget for a large-scale revamp of ISAs \u2013 including the introduction of increased flexibility and plans to help first-time home buyers in their attempts to climb upon the property ladder.<\/p>\n
Osborne\u2019s announcement to Parliament outlined the possibility of making withdrawals from an ISA without losing the tax-free subscription allowance in that tax year, as well as a \u2018help to buy\u2019 ISA, aimed at those saving for a deposit for their first home, into which the government will top up savers\u2019 contributions. The government will also extend the range of ISA-eligible investments.<\/p>\n
Speaking after Wednesday\u2019s Budget, Alan Clifton, Partner at The Financial Planning Group in Teddington, said; \u201cThe news of a fully flexible ISA is great news for savers and the potential of a \u2018help to buy\u2019 ISA is a very interesting concept that we look forward to hearing more details about from the Chancellor and to see how such a scheme would work in practice.\u201d<\/p>\n
Initial details suggest that for every \u00a3200 contributed into a \u2018help to buy ISA\u2019, the government will contribute \u00a350. The bonus is being offered for each person, not each house, so a couple will be able to get up to \u00a36,000 towards their purchase. The payment will be made towards a first home \u2013 it cannot be used to fund a buy-to-let property, even if the buyer does not own another home. The cost of the homes that the account can be used to buy is capped at \u00a3450,000 in London and \u00a3250,000 everywhere else in the UK.<\/p>\n
As ever, it is important to consider all aspects of the budget and it’s vital to seek advice from a qualified Chartered Financial Adviser when establishing how to best structure your medium-long-term investment plans, or an independent mortgage advisor with access to the broadest range of deal across all lenders.<\/p>\n