Budget 2024 wish list: bigger ISA allowance, simplified tax system & more changes we'd like to see

We asked five leading financial commentators what they’re hoping for from Chancellor Rachel Reeves.

All eyes will be on Chancellor Rachel Reeves next month when she announces her first Budget but what do we want to see?

We asked five leading financial commentators what they'd ideally like to be in her speech.

1. Increased ISA allowance

Darius McDermott, managing director of Chelsea Financial Services wants to see the annual ISA allowance increased to £25,000. 

“Since April 2016, the allowance has remained frozen, despite the growing financial pressures on households,” he said.

“Raising this limit would allow savers to maximise their tax-free earnings and better shield themselves from an expected rise in Capital Gains Tax (CGT).”

McDermott also pointed out that ISAs don’t present an upfront cost to the Government – unlike pensions, which offer tax relief on contributions.

2. Simplied ISA landscape

The scrapping of the planned British ISA provides an opportunity to create a simpler ISA landscape that everyone understands, according to Craig Rickman, pensions and personal finance expert at ii.

“As things stand, there are six ISAs in operation (five open to new subscribers) which can make it difficult for people to choose the most suitable type for them and their specific financial goals,” he said.

3. Boost given to VCTs 

Chelsea’s Darius McDermott would like to see a boost to Venture Capital Trusts (VCTs) that offer investors tax relief and support British businesses.

“VCTs have played a crucial role in funding start-ups and high-growth companies, but more can be done to unlock their full potential,” he said.

McDermott believes enhancing tax reliefs and increasing funding limits for VCT-eligible investments would attract greater capital to promising ventures. 

“Encouraging larger corporations to invest in VCTs could create a collaborative ecosystem where established businesses support the growth of emerging industries,” he added.

4. Clarity on the State Pension's future

Labour has committed to the triple lock but everything else is the subject of intense speculation, according to Craig Rickman, pensions and personal finance expert at ii.

“It would be great if Labour could use its first Budget to outline its plans for the State Pension and provide some much-needed clarity,” he said.

Rickman pointed out that the Government faces some big decisions over the coming parliament, notably whether to accelerate the timetable to raise the State Pension age to 68.

“The State Pension alone may not be enough to rely on in old age, but it provides a valuable foundation to meet day-to-day expenditure,” he added.

5. No tinkering with pensions tax relief  

Alice Haine, personal finance analyst at Bestinvest, is concerned that Chancellor Rachel Reeves will use her maiden Budget to change the tax treatment of pensions.

She pointed out that numerous studies have highlighted how people aren’t putting enough aside for their retirement – and is concerned about deterring them further.

“One of the biggest incentives for workers to save is tax relief, which currently gives basic rate taxpayers 20% tax relief while Higher and Additional Rate taxpayers can claim an additional 20% and 25% tax relief respectively,” she said.

Haine fears that cutting the tax relief could have serious longer-term implications. 

“It may spur some to trim their pension savings to retain more of their take-home pay – a move that would put a dent in the nation’s retirement savings and could even cause more people to turn to the state for support when they eventually come to retire. 

6. Tax simplification

Ben Yearsley, director of Fairview Investing, would like to see the Chancellor unveil a package of measures but isn’t getting his hopes up.

“I’d love to see tax cuts, a simplified tax code, and a commitment to a better-run energy market, but I’m not going to see any of those,” he said. “We are going to see tax rises, tax rises and tax rises.”

However, Yearsley wants to see a clear policy for these hikes. 

“If I have to see tax rises then I don’t just want 'smash and grab' ones driven by ideology such as the political VAT on school fees,” he added.

7. Better deals for landlords

Separately, he’d like to see fewer policies that make life tough for landlords.

“The Tories started it and Labour appear set to continue,” he said.” What’s the end result? Fewer good rental properties and probably less tourism in certain areas.”

8. Restoration of Dividend Tax and CGT allowances

An arbitrary hike of the CGT rate could put people off investing and stop them from selling, warned Sarah Coles at Hargreaves Lansdown.

“The treatment of capital gains from investment should be considered differently to that on fixed assets like property and land,” she said.

Coles highlighted the high 0.5% stamp duty on buying shares, as well as the reductions in both Dividend Tax and CGT allowances.

“Restoring dividend and CGT allowances, and reconsidering Stamp Duty on shares, could help offset the impact of inflation and the pain if the Government did decide to increase the rate,” she added.

9. Reversal of Winter Fuel Payment plans

Alice Haine at Bestinvest would love to see the removal of this payment for all but the very poorest pensioners revisited.

“It means excluding a raft of pensioners whose meagre incomes see them only just scrape by each month and runs the risk that some may be forced to make difficult choices between eating and heating this winter,” she said.

10. More useful risk warnings

Sarah Coles at Hargreaves Lansdown would like to see people being helped to better understand the investments they’ve chosen.

“There’s a chance to revisit disclosures and present more digestible bite-sized chunks at a relevant part of the consumer journey,” she said.

Coles added that Hargreaves Lansdown had found blanket warnings don’t necessarily help consumers understand if an investment is right for them.