In the Chancellor of the Exchequer George Osborne’s Budget speech Wednesday 16 March 2016, the CISI was particularly impressed with two initiatives; the change to employer funded advice and the Lifetime ISA.*
1) Employer funded advice:
The current position is that employers are only permitted to spend up to £150 pa paying for advice for employees, otherwise it becomes a taxable benefit in kind. However, quality financial advice requires a thorough fact find of a client’s circumstances and can rarely be provided for £150. The Chancellor increased the threshold to £500 which is much more realistic and an effective acknowledgement that good financial advice is worth paying for.
2) Lifetime ISA
We also welcome the announcement of a Lifetime ISA for those over 18 but under age 40, which is encouraging this group to save or invest for a first property or for their retirement.
What is especially appealing is,
a) the quantum that can be saved
b) the generous 25% uplift, and
c) that the ISA is available for each individual
This means that a couple can save a total of £8,000 a year into an account every year, towards a joint property. This is a significant help to young people so they can save for their own homes.
Note: the CISI has organised a Young Money Debate on 6 April 2016 at Cass Business School ‘Do Young People Need to Change Their Financial Priorities?’, featuring Sophie Robson of MRM, Rohan Sivajoti of Evestor, Scott Moorhouse of 7IM and others. View event information and contact lora.benson@cisi.org if you wish to attend.