The annual ISA tax free savings allowance will be frozen at £20,000 for the 2023/24 tax year, according to Budget documents released today.
There will be no inflation-linked increase for the popular savings vehicle despite CPI running at over 10% at present.
The ISA annual savings limit has now been frozen since 2017/18.
If CPI had been applied to this year’s limit the ISA allowance would have risen to over £22,000 for the next tax year.
The starting rate limit for savings income will also be maintained at £5,000 for 2023-24.
The Treasury says that with the starting rate for savings £5,000, individuals with less than £17,570 in employment income can still receive up to £5,000 of savings income free of tax.
The annual subscription limits for Junior Individual Savings Accounts (JISA) and Child Trust Fund accounts will remain at £9,000.
In other moves, Chancellor Jeremy Hunt shocked the pensions sector in his Budget today by announcing that he would ‘scrap’ the pensions Lifetime Allowance and increase the annual allowance from £40,000 to £60,000. Mr Hunt was expected to increase the much criticised pensions lifetime allowance from £1.071m to £1.8m.
Instead, he went further and scrapped the limit on pension pots completely although pensions professionals are waiting to see the fine detail of the changes.
Mr Hunt said he was scrapping the LTA and increasing the annual allowance to £60,000 to remove barriers on workers, such as medical professionals, from working for longer or going back to work.
The Money Purchase Annual Allowance (MPAA) will also go up from £4,000 to £10,000 per annum.
Some experts have called it a “£4bn pensions giveaway.”
