6th Dec

Osborne Autumn Statement Leaves Hope for Retail Bonds

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.

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