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Craig Whittaker MP
CALDER VALLEY
www.craigwhittakermp.co.uk
Response to Savers (including Pensioners) - March 2015
Thank you for contacting me about savings rates.
Savers have had a particularly hard time in recent years and I am pleased the Chancellor recognised
this in the 2014 Budget. It is important we support those people who have made sacrifices to
provide for their own economic security in retirement and I believe these policies help achieve that.
First, measures have been announced to support savers at every stage of their lives, not just
retirement. This includes raising the limits for Junior ISAs and Child Trust Funds from £3,720 to
£4,000.
Also from 1 July 2014 ISAs there is a new, single New ISA, with an annual limit of £15,000. The rule
that says only half can be saved in cash has been abolished. This gives savers complete flexibility to
save or invest how they wish, and will benefit over six million people previously constrained by the
cash and stocks and shares limits.
Second, for low income savers the Chancellor announced that the 10 per cent rate of tax on savings
income will be abolished and replaced with a new zero rate band. This will be extended to cover the
first £5,000 of savings income and will benefit 1.5 million low income savers.
Third, Premium Bonds are held by over 21 million people in the UK and I welcome the move that in
June the cap on investments in Premium Bonds will be lifted for the first time since 2003, from
£30,000 to £40,000. In addition, from August, two £1 million prizes will be offered per month, rather
than one.
For people aged 65 and over, I welcome the creation of the new pensioner bonds that offer a return
that is better than anything pensioners can get now. Available from January 2015, these provide
certainty and a good return for those who have saved all their lives and now rely on their savings for
income. The one-year bond will pay an annual interest rate of 2.8 per cent, and the three-year bonds
will pay 4 per cent.
Thank you again for taking the time to contact me.
Kind regards,
Craig Whittaker MP