As usual, in the weeks running up to Chancellor Jeremy Hunt stepping up to the despatch box, there was plenty of speculation over what would be announced.
For investors, one of the rumours doing the rounds was potential reform to simplify individual savings accounts, or ISAs.
There were various proposals, and a couple of them made it into the small print following Hunt’s speech.
The main change is that the government will allow multiple subscriptions to ISAs of the same type every year from April 2024. Under the current rules, you can only open one type of ISA each tax year: cash, stocks and shares, or innovative finance. There’s also the Help to Buy ISA, but this is no longer available for new subscribers.
To smooth the process of having multiple ISAs, the government announced that it will allow partial transfers of ISA funds in-year between providers from April 2024.
The government said that it is “making changes to simplify ISAs and provide more choice, meaning it will be easier for people to choose the best ISA accounts for their needs and move money between them”.
- ‘High risk? I don’t see it that way’: the investment secrets of an ISA millionaire
- Six tips to retire using your ISA investments
- SIPP or ISA: which should you prioritise?
Another ISA rule change will allow Long-Term Asset Funds (LTAFs) to be permitted investments in the Innovative Finance ISA. LTAFs, a new type of fund structure that has been recently introduced, invest in illiquid assets including real estate and infrastructure, venture capital, private equity and private debt.
LTAFs differ from open-ended funds in having notice periods of at least 90 days. The notice periods aim to potentially address shortcomings with illiquid assets in open-ended funds, which are daily dealing. As investors have seen time and time again, during periods of stress open-ended property funds have put suspensions in place, due to the illiquid nature of that asset class.
- Eight tips to become a savvy ISA investor
- Fund firm calls for new ISA just to invest in UK shares
- The funds pros have personally invested in for Junior ISAs
Other ISA announcements in today’s Autumn Statement are the digitalisation of the ISA reporting system to enable the development of digital tools to support investors, the inclusion of certain fractional shares, the removal of the requirement to reapply for an existing ISA annually, and tweaking the account opening age for any adult ISA to 18.
Investors hoping for an increased ISA allowance were disappointed. The £20,000 a year limit, which has remained at that level since April 2017, will be frozen for the 2024-25 tax year. The Junior ISA allowance will also remain at its current level of £9,000.
A new British ISA also did not materialise. It had been suggested that the ISA allowance would go up from £20,000 to £25,000, with the extra £5,000 reserved solely to invest in UK equity funds and individual UK-listed shares. Fund management firm Premier Miton has lobbied the government for a new British ISA.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.