The Building Societies Association has welcomed the announcement about the new Help to Buy: ISA made by Chancellor George Osborne in his budget speech today.
The expansion of the existing Help to Buy scheme is another way the government is seeking to help first-time buyers. This time offering to give them a boost worth 25 per cent of the savings they would put in the new Help to Buy ISA.
Welcoming the Chancellor’s announcement that most taxpayers will now receive interest on their savings tax free, the BSA’s head of mortgage policy, Paul Broadhead, said:
“Over the last 20 years, we have moved from an economy based on saving to one based on borrowing. People need to be rewarded for thrift, to know that the Government values those who look after their own futures and help out savers at a time of low rates, whether they are saving for a deposit for their first home or for a rainy day.
“In last year’s Budget, the Chancellor answered our call for sensible reforms to ISA rules, by scrapping the bureaucratic distinctions between cash and stocks and shares account. This year he has gone further with the Flexible ISA, and the Help-to- buy ISA, the principles of which we warmly welcome.
“Given the pressures to keep the bank base rate at 0.5%, the BSA pressed the Government to scrap savings interest taxation two years ago. A new £1,000 Personal Savings Allowance for basic rate taxpayers shows that the Chancellor has come round to our way of thinking, just in time for the last Budget before the General Election.
“In our Budget submission last year, the BSA called for Government support for savers and this year we asked the Chancellor to support home buyers. We are therefore delighted with the intent demonstrated by the Help-to-buy Buyer ISA – to help first time buyers to get over the deposit barrier.
“As ever, the BSA will be examining these proposals in detail and will work with Government and political parties to ensure the best outcomes from these policy ideas. We also call on all political parties to commit to supporting the reforms to savings interest tax and helping first-time buyers onto the property ladder.”
Read more details about the new addition to the Help to Buy scheme in our story, giving the details about rules and requirements for opening and saving into a Help to Buy ISA.
Full details about the new scheme are available online in the HM Treasury’s outline of the scheme.
