The Chancellor has warned of 'tough decisions' to be made in the Budget - we reveal how savers could be affected
The Chancellor has warned of 'tough decisions' to be made in the Budget - we reveal how savers could be affectedInstead, speculation has abounded about changes to pension tax relief and tax-free cash after the Chancellor warned of “tough decisions” coming ahead.
The Resolution Foundation, a research organisation seeking to improve living standards for those on low and middle incomes, previously called for a lifetime cap on ISA savings of £100,000. However, there is an early withdrawal charge of 25 per cent – effectively acting as a 6.25 per cent exit penalty – if savers choose to take out money for any reason other than purchasing a first home costing up to £450,000 or for retirement.
However, James Blower, founder of The Savings Guru, says while ISAs are “desperate for reform” the Chancellor has “bigger priorities than sorting those out for now”. “However, the means testing of the winter fuel allowance means this now looks highly unlikely as it would invite more flack if she was seen to give away tax breaks to savers when many pensioners have had the allowance taken away.
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