UK Government Introduces New British ISA with £5,000 Additional Allowance

The British ISA aims to bolster investment in UK companies by offering an extra £5,000 tax-free investment allowance, on top of the existing £20,000 limit.

• The new British ISA will allow savers to invest an additional £5,000 tax-free in UK companies, raising the total annual allowance to £25,000.
• Designed to encourage investment in London-listed shares and support UK businesses, the initiative comes amid declining interest in the UK stock market post-Brexit.
• The government will consult on the ISA's specifics, including eligibility for investment funds and bonds, and how transfers from other ISAs will be managed.
• Critics argue the additional allowance will benefit only a small group of wealthier investors, as most savers do not use the full existing £20,000 limit.
• The announcement received a lukewarm response from the stock market, with the FTSE 100 index closing just 0.4% higher after the news.

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