Budget 2010: Good news for your clients?

There was good news for first-time buyers and the ISA allowance represents OK news for savers...but there wasn't much else. Advisers give their verdicts.

Darius McDermott, MD, Chelsea Financial Services

"We welcome the inflation-proofing of ISA limits. Crucially, this announcement re-affirms the Chancellor's commitment to ISA saving, and ensures that future allowances will not be eroded by inflation. But let's be clear; this is no great boon for UK savers and investors.

Linking the ISA allowance to inflation will only serve to keep the tax wrapper from obsolescence, not make it more attractive investors. If the Chancellor is serious about getting the UK saving and investing again, he will need to raise ISA limits substantially in the coming years and, most importantly, re-instate the dividend
tax credit."

Patrick Connolly, AWD Chase de Vere

"All the potential hits were on the high earners. Without a doubt there are political motives behind today's Budget. The move to raise the Stamp Duty threshold for first-time buyers was interesting because, of course, FTBs are more likely to be potential Labour voters. It is the top end being hit and the masses not really at all.

The ISA announcement was minor really. What would the rate of inflation be on the current limit of £10,200? £200 or something? Ideally we would like to see limits rise, maybe to £15,000 or £20,000. The bigger picture remains: not enough people are saving and those who do are not saving enough.

"The last few lines of the Budget were nothing short of a party political broadcast."

Adrian Lowcock, senior investment adviser, Bestinvest

"The announcement to raise the annual allowance of ISAs to keep inline with inflation from April 2011 is good news for investors. The rise will be based on Septembers RPI figure and will be rounded to the nearest £120 which takes into account the monthly savers and makes it manageable for the investment community to prepare for the increases.

"Based on February's RPI (3.7%) this would raise the personal ISA allowance to £10,560, however as I believe inflation has peaked this year and is likely to fall so would expect the actual increase to be lower than this in September.

"Raising ISA limits from the current levels will only really help higher earners who can afford to make the full contribution. More needs to be done to make ISAs more accessible and easier to understand to encourage a wider take up. Removing the Dividend Tax Credit to make ISA's truly tax free would be a good step."

Alan Easter, director, Willis Owen

"The pledge to increase the ISA allowance is a positive move. However, there is a danger that raising the allowance by a small amount every year will cause confusion for consumers. It will also cause difficulties for those consumers who invest on a monthly basis who would have to alter the direct debit payments.

"We have seen a big increase in the number of people investing in an ISA this year compared to last. This shows that confidence is on the rise and also that investors are increasingly aware of the savings on offer by investing direct via a discount broker.

"The ISA deadline this year falls over Easter weekend. We will be open for business but investors would be wise to secure their allowance in advance to avoid any potential problems."

Nigel Speirs, CEO, Buckles

"It is very pleasing to see the ISA allowance increase in line with inflation - this will provide a small boost for savers and is good news for both clients and our business.

"The doubling of the threshold in Stamp Duty to £250,000 is also very welcome and is obviously very good news for first time buyers (FTBs). This will help nine out of 10 FTBs. The freezing of IHT was pretty much expected and is a major battleground in the election.

"On the whole, this was a good Budget but the measures announced were as expected. But essentially, I think it contained just a few tweaks that didn't cost too much and all the big decisions on tax were made in the Pre-Budget Report with regard to income tax and national insurance. It was a tinkering budget with political overtones prior to the election."

Malcolm Small, director of portfolio and retirement planning, TISA

"I am disappointed - there was nothing new on restrictions to the higher rate of pensions tax relief and it is being implemented as expected.

"I thought the indexation of ISAs with inflation was good news but it might have been better to index it to wages - but the move at least provides certainty in the savings environment. It was also good news that capital gains tax (CGT) was held at 18%.

In terms of pensions, there was nothing very dramatic. And watching the Budget as a whole seemed like watching someone list their past achievements. There was very little in new substance."

Adam Young, Dragonfly Financial Planning

"The removal of tax allowances for those on over £100,000 is very significant. This is an issue we are seeing more and more of. We have already seen a large number of people making, or at least thinking about, the move abroad as a consequence of the more punitive tax regime in the UK. The retrospective style HMRC is adopting with regards to offshore money is removing confidence in people coming here to the UK to do business.

"Both CGT measures are fantastic news, but I have to smile. Why freeze IHT and not remove the CGT threshold? There is no clear strategy here."

Harry Kerr, director, Avalon

"Overall there is a sense of relief that nothing horrible has come out bearing in mind all the big tax increases already announced in last December's PBR.

"There will be big relief all round that CGT was not increased and given that there is no longer any indexation or taper relief available, that seems reasonable. It emphasises the fact that onshore life assurance bonds are not as suitable as a portfolio of unit trusts for most people.

"The news on ISA allowances being increased in line with inflation is good but whether that will always happen is debatable given how the Government has backtracked in the past on increases of pension and IHT allowances. A small disappointment was there was no mention of additional allowances for a green ISA.

"Darling talked of helping small companies via help on business rates and doubling of entrepreneurs' relief -but there is still the extra 1% increase in national insurance for employers which is a tax on jobs."

Malcolm Small, head of marketing at Transact

"This Budget is good news for financial planners because it demonstrates the public is on its own going forward and cannot rely on the Government to provide anything more than the bare minimum.

"Nothing much has changed. If I was an IFA I would now be going out and encouraging my clients to save.

"We need radical reform of the pension system but nothing significant came out of the Budget. Tax credits kill any incentive to save and the Budget provided no incentive for people on the margins of society to save. It was clearly a dressed-up pre-election budget."

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