Chancellor Jeremy Hunt has today announced a brand new British ISA which will allow an additional £5,000 annual investment for investments in UK equity, and has implemented a 2p cut in national insurance (NI) rates effective in April.

Delivering the Spring Budget, Hunt said the latest ISA move will be on top of the existing ISA allowances, and has all the tax advantages of other ISAs.

Furthermore, the latest NI announcement, which takes the main rate for employee NI from 10% to 8% and doubles down on the cut from 12% to 10% announced at the Autumn Statment, is expected to cost £10bn. It will also result in an annual saving of £349 for someone earning £30,000, rising to £749 for someone earning £50,000 and £754 for higher rate taxpayers.

Commenting on the ISA, Aegon pensions director Steven Cameron said: “The new British ISA will appeal to those who currently max out their ISA limits, providing scope for an extra £5k tax-free saving. It will also offer transparency, appealing to those who wish to be certain their investment is staying within the UK. It will be important the forthcoming consultation creates an unambiguous definition of what qualifies as a UK investment within a ‘British ISA’.”

Cameron did add a word of caution regarding the new Isa and added: “Investors should however be mindful about putting all their ‘eggs in one basket’.

“Diversifying across different asset types and geographical locations can be an important way of managing investment risk, something which should be emphasised to potential investors.”

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