There was good news in the Autumn
Statement for the retail bond sector after the Treasury announced plans to
loosen rules around their inclusion in tax-efficient saving accounts; this
could see the sector gain greater access to the UK ISA market, which is
estimated to be worth £440 billion.
The government said it was exploring
plans to help increase the number of retail bonds allowed to be included in
ISAs by cutting the length of maturities.
Currently only retail bonds which pay
out after five years are permitted for inclusion but the Treasury wants to
change this to allow funds with under five years maturities.
The statement said: ‘The Government
is exploring whether to increase the number of retail bonds eligible for stocks
and shares Isas by reducing the requirement that such securities must have a
remaining maturity above 5 years’.
Equity Finance
Jason Hollands, of broker Bestinvest
says the move is ‘a nod to the rapidly expanding retail bond industry’.
The statement adds the government
will publish a discussion paper on enhancing equity financing in the UK.
It says this includes options to
improve access to public equity markets for UK businesses and retail investors.
The Quoted Companies Alliance
welcomed the proposal and said it could help SMEs ‘raise equity finance more
efficiently and effectively’.
However, Mr Osborne disappointed some
by failing to mention whether he would allow parents to transfer their child
trust funds (CTFs) into Junior ISAs, which offer better value for money.