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Isa Tax Break Saved: Chancellor Reverses Cut
28 Oct
Summary
- Chancellor will maintain the £20,000 annual tax-free Isa limit.
- The reversal aims to encourage stock market investment through education.
- Building societies depend on Isa deposits for crucial mortgage lending.
Chancellor John Healey will maintain the annual tax-free Isa allowance at £20,000, reversing a previous proposal to reduce it to £12,000. This decision aims to encourage greater public investment in stocks and shares through education rather than restrictive measures.
The reversal is anticipated to be met with approval from banks and building societies, as cash Isas are a vital source of funding for mortgage lending. Building societies, in particular, rely on these deposits to support first-time buyers.
Healey plans to emphasize the advantages of stock market investments for generating higher returns. This approach is seen as more effective than simply cutting tax breaks on savings, which could have negatively impacted mortgage availability.
