ISA saving limit
The annual ISA savings limit is rising from £15,240 to £20,000 for all adults from April 2017.
New lifetime ISAs
Those between the age of 18 and 40 will be able to save up to £4,000 per year in a lifetime ISA from April 2017 until they turn 50. To this the government will add a 25% bonus so that those who save the maximum each year will receive a state top up of £1,000. The fund is expected to be more flexible than a pension and it is possible to withdraw funds from the ISA at any time before reaching 60 but this will mean losing the government bonus and paying a 5% charge.
The ISA funds can be used by first time buyers for a home worth up to £450,000. The ISA accounts are limited to one per person so a couple can both receive the bonus when buying together. It can also be taken as a tax free retirement fund at the age of 60.