Cicero Policy Briefer

Issue 6, November 2006

Savings revolution announced

By Iain Anderson

Many congratulations to one of Cicero Consulting's longest standing clients - the Pep and ISA Managers Association (PIMA) - who have secured the largest ever reform package to the ISA regime since it was launched in 1999.

At the PIMA annual conference this month Economic Secretary Ed Balls MP announced the reforms, which include:

• A commitment to a permanent future for ISAs beyond 2010
• The removal of the mini/maxi distinction
• The rolling of Peps into the ISA wrapper
• The rollover of some existing savings vehicles, such as the Child Trust Fund on maturity, into ISA

PIMA's positioning as one of the leaders in the debate around the development of the Child Trust Fund has certainly paid dividends and ensured that the majority of its reform shopping list issued to Treasury in the summer has hit the mark.

There is no doubt both ISAs and Peps have been a tremendously successful savings tool with over £190bn invested in ISAs since their launch in 1999.

The really good news for both providers and for consumers is the commitment from Government to the ISA regime indefinitely. This allows providers to plan product offerings and systems well into the future and to build other offerings on the ISA platform. It also allows consumers the certainty that the regime will not change in the long term. These are two factors which are vital components towards restoring confidence in long-term savings.

An early Christmas present from the Chancellor to us all!

Iain Anderson can be contacted on +44 (0)20 7665 9532 or click here to email.

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