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1.225 The government will allow ISA savers to withdraw and replace money fromtheir cash ISA without counting towards their annual ISA subscription limit for thatyear, as long as the repayment is made in the same tax year as the withdrawal. Thiswill enable savers to access their ISA savings more flexibly without losing the benefits they havebuilt up. These changes will be introduced in autumn 2015, following consultation with ISAproviders.1.226 Following technical consultation with the financial services industry, the governmentwill extend the range of ISA eligible investments in 2015-16 to include listed bondsissued by a co-operative society and community benefit society and SME securitiesissued by companies trading on a recognised stock exchange. The government willalso explore further extending the list to include debt and equity securities offeredvia crowd funding platforms, and will consult in summer 2015 alongside a response to theconsultation on how to include peer-to-peer loans.1.227 As a result of their popularity, the government announced in February 2015 that NationalSavings and Investments 65+ bonds would remain on sale until 15 May 2015. These bondshave seen unprecedented demand – the biggest opening sale of any retail financial product inBritain’s modern history – and the government has extended the issuance to ensure that eligibleinvestors do not miss out on the market-leading rates on offer.Help to Buy: ISA1.228 In recognition of the impact the low interest rate environment has had on theability of first time buyers to get on the housing ladder, Budget 2015 announces theHelp to Buy: ISA. This will reward people that are making the difficult choices required to saveregularly, and help them realise their aspirations of homeownership for the first time. The schemewill work by providing a government bonus to each person who has saved into a Help to Buy: ISAat the point they use their savings to purchase their first home. For every £200 a first time buyersaves, the government will provide a £50 bonus up to a maximum bonus of £3,000 on £12,000of savings. Savers will have access to their own money and will be able to withdraw funds fromtheir account if they need them for another purpose but the bonus will only be made availablefor home purchase. Further details are provided in the document ‘Help to Buy: ISA’. 101Figure 3: How the Help to Buy: ISA will workFirst time buyer opens aHelp to Buy: ISAFirst time buyer makesmonthly deposits andgovernment bonus growsBuyer purchases their firsthome and governmentbonus made available25% governmentbonusMax £3,000Homepurchased25% government bonusMaximuminitial depositof £1,000Max monthlybonus £50Maxmonthlydeposit£200First time buyersavings includingtax-free interestThe bonus isavailable onhomes up to£450,000 inLondon, andup to £250,000outside London101Help to Buy: ISA, HM Treasury, March 2015.58 Budget 2015
Extending freedom and choice at retirement1.229 This government has already introduced major reforms to allow people enteringretirement much more flexibility over how they use their defined contribution pension pot,instead of being required to purchase an annuity. The government now wants to allow peoplewho have already bought an annuity to also enjoy flexibility in how they access the value of theirannuity, without interfering with binding contractual requirements.1.230 From April 2016, the government will therefore change the tax rules to allowpeople who are already receiving income from an annuity to sell that income to athird party, subject to agreement from their annuity provider. The proceeds of the salecould then be taken directly or drawn down over a number of years, and would be taxed at theirmarginal rate, in the same way as those taking their pension after April 2015.1.231 The government believes that for most people, continuing to hold their annuity willbe the right decision. However, for others, this reform will allow them the flexibility to use thevalue of their annuity as they see fit. The government is therefore publishing a consultation onhow best to remove the barriers to the creation of a secondary market in annuities, invitingviews on how best to ensure that consumers are in a position to make an informed decision.The government will work with the Financial Conduct Authority (FCA) to consult on how bestto support people’s choices through consumer protection, and protect those who are mostvulnerable. 1021.232 It is important that the UK’s pensions tax system remains fair, affordable and sustainablefor the future. In 2013-14, Income Tax relief for pension savings cost the government around£34.3 billion, up from £30.8 billion in 2009-10, with around two-thirds of this relief going tohigher or additional rate taxpayers. 103 To protect the public finances from this growing cost, thegovernment will therefore reduce the lifetime allowance for pension contributionsthat benefit from tax relief from £1.25 million to £1 million. This will be effective from 6April 2016. The lifetime allowance will be indexed to increase annually by CPI from 6April 2018. Over 96% of individuals currently approaching retirement have a pension pot worthless than £1 million, so this change will affect only the wealthiest pension savers. 104Mental health1.233 The government is committed to parity of esteem between physical and mental health.The NHS Mandate includes a commitment to closing the health gap between people withmental health problems and the population as a whole and from April 2015 there will benew access and waiting times standards introduced for key mental health services. AutumnStatement 2014 committed £150 million over five years to caring for young people with eatingdisorders and funding to expand pilots testing new ways to support those with mental healthproblems to return to work. To go further, Budget 2015 announces a £1.25 billionpackage of additional investment.1.234 Many children and young people experience problems with their mental health,and the government wants to ensure that they get the services that they need. This is whyBudget 2015 will be providing over £1 billion over the next 5 years to start newaccess standards which will see over 110,000 more children cared for over the nextParliament. Alongside this, the government will be providing £118 million by 2018-19 to complete the roll-out of the Children and Young People’s Increasing Access toPsychological Therapies (CYP IAPT) programme, ensuring that there are talking therapistsin every part of the country providing the best quality treatment for children.102Creating a secondary annuity market, HM Treasury and Department for Work and Pensions, March 2015.103HMRC Statistics Table PEN6 – Registered pension schemes: cost of tax relief.104HMRC analysis of Office for National Statistics Wealth and Assets Survey, 2010-12 data.Budget 201559
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BUDGET 2015HC 1093March 2015
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© Crown copyright 2015This publica
Page 6 and 7:
Executive SummaryWhen this Parliame
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Public sector net debt is forecast
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Chapter 2 sets out all measures ann
Page 12 and 13: Budget Report
Page 14 and 15: monetary policy and measures to sup
Page 16 and 17: Chart 1.2: International comparison
Page 18 and 19: developed countries. 19 The recent
Page 20 and 21: 1.27 The UK economy faces a number
Page 22 and 23: 1.39 Inflation fell markedly to 0.5
Page 24 and 25: Financial sector and other asset sa
Page 26 and 27: Fiscal forecast1.57 As set out in T
Page 28 and 29: Chart 1.6: Consolidation in the cyc
Page 30 and 31: shocks to the economy, even though
Page 32 and 33: and focus their budgets on providin
Page 34 and 35: of options to integrate spending ar
Page 36 and 37: Devolution1.95 The government conti
Page 38 and 39: Growth1.103 The UK economy had the
Page 40 and 41: Supporting business through the tax
Page 42 and 43: a 21 st century economy. The terms
Page 44 and 45: 1.124 The broadband connection vouc
Page 46 and 47: country to get onto the property la
Page 48 and 49: network of high quality rail connec
Page 50 and 51: to support tourism in the North Eas
Page 52 and 53: South East1.174 Housing: Housing re
Page 54 and 55: 1.185 The government will also prov
Page 56 and 57: Infrastructure Investment Bank (AII
Page 58 and 59: Fairness1.205 The government’s lo
Page 60 and 61: National Minimum Wage1.213 As annou
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Page 78 and 79: Midlands2.40 High Speed Rail Invest
Page 80 and 81: International development2.63 Antim
Page 82 and 83: 2.78 Social investment - The govern
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Page 90 and 91: 2.147 Tobacco Duty rates - As annou
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Page 94 and 95: 2.191 Simplified expenses: legislat
Page 96 and 97: ••strengthen the descriptions o
Page 98 and 99: 2.226 Smart ATMs - The government w
Page 100 and 101: 2.242 Promoting the use of task-sha
Page 102 and 103: 2.264 Science grand challenge fundi
Page 104 and 105: 2.286 Northern powerhouse trade mis
Page 106 and 107: 102 Budget 2015
Page 108 and 109: Gilt issuance by maturity, type and
Page 110 and 111: Illustrative future gross financing
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Table C.1: Detailed summary of OBR
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Table C.3: Current Receipts: OBR fo
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Table C.5: OBR forecast of the head
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Table C.8: Changes to the OBR’s f
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EISEPSRCEREUFBCFCAFCERMFCOFITsFLSFP
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LIST OF TABLESExecutive Summary1 Su
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HM Treasury contactsThis document c
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