Tax-free ISA limit to increase by £200 for ISA's to help poor
UK ISA savers and financial institutions are to be offered incentives for investing in schemes that help disadvantaged children turn their lives around.
An independent report commissioned by the Prime Minister, David Cameron attempts to replace initiatives that would normally be funded by the state and encourage private companies and investors to run them instead with financial incentives to companies that run schemes which succeed in steering children away from crime and drug and alcohol abuse.
David Cameron will endorse the report today saying that it makes “the economic, fiscal and moral case for switching public spending from dealing with the causes of social failure towards investing in programmes that prevent the failure in the first place.”
The report has been written by Graham Allen, Labour MP for Nottingham North and it is expected to make the case that early intervention is more effective and cheaper in the long term that trying to fire-fight the outcomes of problems cause by earlier experiences of children.
One mooted idea is to offer the 20 million ISA account holders a further £200 tax-free savings limit through an early intervention ISA. Another potential way of utilising ISAs for this idea is to encourage families to use Junior Isa’s for this purpose.
The profits from the scheme will come from helping reduce the cost of benefit claims and a reduction in crime. There will be a system of payment by results to private firms who help prevent children from getting involved in crime and other activities that hurt society.
The cost to society of children with behavioural problems is estimated to be £70,000 on average by the time the child reaches the age of 28.
Profits will come from the resulting lower cost of benefit claims and dealing with crime and the report is expected to recommend a series of tax breaks in the next budget to encourage companies and individuals to invest.
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