The Government has responded to representation from the ABI (Association of British Insurers) in the Pre-Budget Report and removed the current £1,000 limit on insurance ISAs.  The ABI also welcomes the fact that the Government has once again decided not to implement its proposed changes to the tax regime for life insurance savings products.

“Today’s announcement marks a significant step in providing a level playing field for ISA providers as well as offering ISA savers a greater choice of how to spread investments within their ISAs”, says Peter Vipond, Head of Financial Regulation and Taxation at the ABI.

 “We have been calling for a simplification of the Government’s limits on how much can be invested in an insurance-linked ISA, and today’s proposal to treat all the Sandler medium-term stakeholder products as ‘qualifying investments’ for the ISA ‘stocks and shares’ component is a welcomed move”, continues Vipond.
 
The ABI has also campaigned strongly for the customer and against the Government’s proposed changes on life policy taxation.  Says Peter Vipond:  “We are encouraged by the Government’s decision not to implement its plans to abolish qualifying policy rules and tax deferral on withdrawals of up to 5% a year, and this marks a significant win for the customer”.

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Notes

1.  Enquiries to: 
 Alan Leaman  020 7216 7440 (Mobile: 07957 482330)
 Malcolm Tarling  020 7216 7410 (Mobile: 07776 147667)
 Lucy Butler  020 7216 7411 (Mobile: 07712 841184)
 Emma Quantrill  020 7216 7392 (Mobile: 07712 841183)
 
2.  The ISA rules will be changed to abolish the separate insurance component.  Instead all life products (not just Sandler approved ones) will be eligible for inclusion in the stocks and shares component, so the maximum contribution by way of premium to a life policy will be £7,000 instead of £1,000.

3. The ABI is the trade association for Britain’s insurance industry. Its more than 400 member companies provide over 97% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold more than a fifth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

4.   An ISDN line is available for broadcasts.