Budget 2014: Savers in Suffolk will be a ‘paltry’ £19 a year better off with new combined tax-free Nisa, says Money Saving Expert Martin Lewis
PUBLISHED: 16:08 19 March 2014 | UPDATED: 16:09 19 March 2014
Savers in Suffolk will be able to put aside up to £15,000 a year tax free, the Chancellor announced today.
Revealing his 2014 Budget, Chancellor of the Exchequer George Osborne said the current cash ISA and the stocks and shares ISA will be combined to create a new ISA - Nisa.
Nationally, banks and building societies have hailed the move, with nationwide describing it as “much-needed support for ordinary savers”.
But Moneysavingexpert.com founder Martin Lewis said the benefits of the Nisa would be significantly held back by paltry interest rates available on cash deposits.
He calculated the additional tax gain from the increased limit would work out to just £19 a year more on the best deal in the market, which pays 1.65%, for basic rate taxpayers who invest the full £15,000.
He said: “While it’s a good long term gain, dig through the current numbers and the advantage of increasing the cash ISA limit from £5,940 to the new Nisa limit £15,000 isn’t as big as many will think.
“This is because you can’t ignore the fact that cash ISA rates are at all-time lows.”
Will you be taking advantage of the Nisa? Share your thoughts on the budget via Twitter today using #Budget2014 #Suffolk, or leave a comment below.