Will the budget focus on ISA changes and support for first-time buyers and retirement savings?

Hargreaves Lansdown are of the view that expectations regarding the upcoming Budget should particularly focus on ISA changes and support for first-time buyers and retirement savings:

  1. Investment in British Companies: The government is expected to emphasize investing in British businesses, potentially through positive ISA changes. This could include halting planned cuts to dividend tax and capital gains tax allowances, as well as cutting stamp duty on share purchases. However, introducing a separate British ISA could add unnecessary complexity and may not effectively boost UK investment.
  2. First-Time Buyers: There’s anticipation for measures to support first-time buyers. While changes to stamp duty on property have been discussed, focusing on enhancing the Lifetime ISA (LISA) could be an effective option. Tweaks such as reducing the penalty for withdrawals and linking the maximum house price limit to overall house prices could encourage more people to utilize the benefits of a LISA for property ownership.
  3. Supporting Saving for Retirement: There’s a need to support retirement savings, especially for the self-employed. Opening up LISAs to people aged up to 55, allowing both opening and contributions, could expand access to retirement savings for this group. Additionally, removing the penalty for early emergency withdrawals would tailor LISAs to the needs of the self-employed and boost retirement savings.
  4. Budget Expectations: While the public finance figures offer some headroom for potential moves, dramatic tax cuts may not be feasible. However, there’s room for targeted measures, including changes to ISAs, to support specific groups. Any potential changes may emerge as topics for consultation rather than immediate major reforms.

Overall, the Budget is expected to address key issues such as investing in businesses, supporting first-time buyers, and enhancing retirement savings, with ISAs likely to play a central role in these initiatives.




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