Summary
Chancellor Rachel Reeves plans to lower the tax-free savings limit for cash Individual Savings Accounts (Isas) from £20,000 to £12,000. This change aims to encourage more investments in stocks and shares. Isas are tax-advantaged savings or investment accounts available in the UK.
Key Facts
- An Isa is a type of savings or investment account that offers tax benefits.
- Currently, the tax-free savings limit for Isas is £20,000 per year.
- The proposed change would reduce this limit to £12,000 for cash Isas.
- Cash Isas function like regular savings accounts but have the benefit of tax-free interest.
- Stocks and shares Isas involve investing money in stocks or other funds, with potential tax-free returns.
- Other types of Isas include Junior Isas, Lifetime Isas, and Innovative Finance Isas.
- The government's goal is to boost investment in the UK economy through these changes.
- New advertising strategies may encourage people to invest rather than keep money in low-interest accounts.
