He also announced ISA tax reforms, stating:
"At the moment, when someone dies, the savings in their ISA lose their tax-free status and their spouse starts paying tax on that money.
"From today, I can announce that when someone dies, their husband or wife will be able to inherit their ISA and keep its tax free status."
Industry experts have said that the ISA reforms will 'change attitudes to saving'.
Tony Stenning, Head of UK Retail at BlackRock, comments:
“Today’s announcement by the Chancellor is another step in the once-in-a-generation opportunity to change Britons’ attitudes to saving and developing long-term policies which put savings back at the heart of the country’s economic agenda.
“Our own Investor Pulse research shows that 40% of Britons save or invest in ISAs, with many using them as portable savings pots to supplement their pensions. ISAs are a simple, accessible and tax efficient savings vehicle. Their continued success shows that Britons are inclined to save more if they have greater certainty around the taxable benefits within well designed products that are both accessible and simple.”
“But it’s not just down to policy. At the same time, we as an industry need to work together to simplify products so savers can really understand what they are putting their money into and what the overall goal is. ISAs reflect this ambition; they are one of the most simple and straightforward tax-efficient savings products available, and therefore one of the most successful.
“We are fast reaching tipping point in the economy, and policy makers have worked hard to get the British economy back on track. It’s now time to shift our attention to saving, because if we don’t, the financial crisis will fast transform into a savings crisis. One that low interest rates will have no role in fixing.”
Kate Smith, Regulatory Strategy Manager at Aegon said:
“Today the Chancellor continues his quest to set out fairer deal for savers, most people view their house as the major financial asset that they leave behind to their loved ones. The Chancellor has sought to put both pensions and ISA savings on an equal footing by encouraging people to view them as assets that can be passed on without punitive rates of tax.
“By incentivising long term saving, the Chancellor may encourage people to put more money towards their pension and ISA, safe in the knowledge, that should the worse happen, their saving will not have been in vain and that those closest to them will see the benefit.”
Bruce Davis, Cofounder and CEO of ethical investment crowdfunder ‘Abundance’ said:
“The Autumn Statement delivered almost all of the P2P and Alternative Finance Christmas wishes in one go. The extension of the ISA consultation to debt securities means that P2P investors will also be able to add debentures and bonds into their ISAs - which will revolutionise investment in green infrastructure and other ethical investment projects and mean that Abundance investments would attract ISA tax breaks.
"We also welcome the continued focus on creating a level playing field for P2P and crowdfunding to compete with the mainstream banks by ensuring lenders can write off bad debts (as banks already do), opening up bank data and investigating the market for payment and banking services provided to alternative finance."
