The Autumn Statement failed to address several major issues in the savings market.
Savers were left disappointed by the 2013 Autumn Statement which failed to address issues such as the transferring of Child Trust Funds (CTFs) to Junior ISAs.
There had been predictions that the Chancellor, George Osborne, would address this. But the only reference to chlild savings was to confirm an increase in the subscription limits from £3,720 to £3,840 in 2014-15 for both products.
A new ISA limit of £11,880 for the next tax year was confirmed, of which £5,940 can be in cash.
Converting CTFs to Junior ISAs
More than six million children currently have CTFs, but at the moment it’s not possible to move the cash within one into a Junior ISA.
Junior ISAs were brought in to replace CTFs in 2011. One of the key differences is that CTFs included a contribution from the Government. With Junior ISAs, it's all the cash of the parents or family members.
The trouble is that CTFs are now in terminal decline, as providers turn their attention to Junior ISAs. And as a result children with one are missing out through lower rates and fewer investment choices.
Compare Junior ISAs with lovemoney.com
Peer-to-peer savers
Another obvious blank from the Autumn Statement was a mention on peer-to-peer lenders. Many of the leading providers had expected the Chancellor to make an announcement confirming the inclusion of peer-to-peer lending within the ISA umbrella from April next year.
[SPOTLIGHT]But there was no mention of peer-to-peer at all, which is growing increasingly popular with both borrowers and savers. As peer-to-peer sites cut out the middle man - the bank - they are able to offer borrowers cheaper loans and lenders benefit from higher interest rates than if they were saving with the high street banks.
From April they're set to become regulated by the Financial Conduct Authority (FCA). But it seems the Government still has questions over how they operate, hence the failure to include them in ISAs.
Samir Desai, CEO and co-founder of Funding Circle, said: “We remain confident that the proposed inclusion of peer-to-peer lending in ISAs will happen. When it does it will be a huge win for British investors up and down the country, and will represent a seminal moment for our industry.
"It will ensure British people earn inflation-beating, tax-free returns, whilst supporting the country's economic recovery. We look forward to contributing to any consultation period."
Read: What is peer-to-peer (P2P) lending?
Compare the rates of interest you can earn through peer-to-peer lending
ISAs
An ISA cap limiting the amount savers can invest in their lifetime had been suggested before the Autumn Statement, but thankfully this was left out.
There will be changes to the inclusion of retail bonds in ISAs though. At present retail bonds - which are essentially IOUs from companies - can only be included in your ISA if the bond matures in five years or more from when you purchase the bond. However, the Government is looking to expand this to all terms of retail bond, though not 'mini-bonds'. For more on retails and mini-bonds read Beginner's guide to bonds.
It was also suggested before the speech that savers should be able to make up their full ISA limit in cash. This was again left out, despite several banks and building societies calling for this to be changed.
Graham Beale, chief executive of Nationwide Building Society, said it is unfair for those who prefer to put their savings into a Cash ISA, and leads to widespread confusion around how savers can maximise their tax-efficient ISA allowance.
What do you think? Were savers let down by the Autumn Statement? What else should have been included?
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