More proposals for the future of ISAs have been announced, and it looks promising for Fools who like getting better deals!
Ed Balls of the Treasury said a few weeks ago that ISAs are here to stay. Yesterday he started to fill in a few of the blanks.
The Treasury is now proposing that anyone with cash ISAs will be able to transfer them to shares ISAs. Transfers don't affect your annual investment limit, so you could make the transfer and still invest more in ISAs in the same year.
"By removing this restriction, our aim is to further promote share ownership by encouraging savers to diversify their assets and benefit from the potentially higher returns offered by stocks and shares over the long run," said Balls (Foolishly).
There's no news as to whether savers with TESSA-Only ISAs might be able to transfer to shares ISAs in the same way. Also, nothing further has been added about what the future overall limits will be. So far, the Treasury has just confirmed that the limit will not be lower than the current one of £7,000. Decisions on limits will be announced in Budgets.
Balls said that "there will still be different investment limits for cash and shares within the £7,000 overall annual allowance". However, he didn't specify what these limits were either.
At present you can invest up to £7,000 in shares, or you can invest up to £3,000 in cash and £4,000 in shares. If you invest a single penny in cash, the maximum you can invest in shares that year is £4,000. It remains to be seen whether these limits will remain the same.
Previously, Balls announced that we'll have cash ISAs and shares ISAs, instead of mini- and maxi-ISAs, and savers will be allowed to shop around for each ISA. This greater flexibility and choice will undoubtedly mean people get better deals.
The details are vague, presumably whilst the Treasury hammers out precisely how ISAs will work in the future. We'll probably know more after the Pre-Budget Report in a few weeks' time.
Check out our savings and investment centres.
