Budget 2009: PM hints at ISA limit increase

Wednesday, 11 March 2009 12:00

Savers could benefit from a possible increase on ISA limits, the prime minister has hinted.

Speaking on Radio 4, Gordon Brown said there would be "announcements" in the Budget that would help people reliant on the income from their savings.

During the programme, Mr Brown was accused of ignoring the plight of those who have seen their income dwindle as savings rates have fallen.

Mr Brown denied this, and said: "We are looking at how the individual savings account can be made more attractive for the future, particularly for people like you. We are trying, obviously, to make sure in an era of low inflation that the incentives to save can remain high."

"These are the things that we're intent on doing. I think in the budget you will see some announcements," he added.

Currently, savers can invest up to £7,200, with a limit of £3,600 for cash, in an ISA each tax year.

Gordon Greig, head of savings and investments at Scottish Widows, said: "We would definitely welcome an increase in individuals tax free savings allowance.

"Everyone who is able to put some money away should be taking advantage of their ISA allowance in 2009 - it's tax-free, simple, and an ideal place to start saving for the future, even if you haven't managed this in the past. "

Research from the third annual Scottish Widows Savings and Investments Report reveals that despite the vast majority (72 per cent) of people wanting to start saving for the future, three out of five (60 per cent) do not intend to take advantage of the tax breaks that currently exist.

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