Budget 2014: Changes to Pensions and ISAs

A number of measures have been announced by chancellor George Osborne that are welcome news for savers and investors.

In his latest budget, he announced changes to pensions that are designed to give flexibility and give pensioners more control over their money.

These changes include, allowing all those over 55 access to their pension pot to use in any way they see fit, removing the requirement to take out an annuity, increasing the amount that can be taken from a small pension pot as a lump sum to £10,000, a reduction in the minimum income requirement for accessing a flexible drawdown from £20,000 to £12,000 and increasing the triviality limit from £18,000 to £30,000.

Alongside this, the chancellor announced sweeping reforms to ISAs, merging cash and investment products into one single ISA, or NISA.

The changes include, an increase in the amount of cash that can be saved tax free to £15,000, the ability to transfer between cash and shares ISAs, and increasing the sum that can be put into a Junior ISA to £4,000.

Ian Hemingway, managing director at Ludlow, said: “We welcome the changes to both pensions and ISAs as the reforms bring with them more choice and flexibility for investors.

“We hope that by increasing the allowances savers can make into ISAs this will encourage more people to make the most of their yearly allowance.

“What is vital though is to get the right advice for your situation to ensure than you make the most of your pension when you come to draw it, we would recommend speaking to your Ludlow consultant as soon as possible to find out what the changes mean for you.”

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