Spring Budget 2024: A British ISA, new bonds from NS&I and further cuts to National Insurance

Find out what the measures announced in the 2024 Spring Budget mean for your finances.

The Chancellor of the Exchequer, Jeremy Hunt, delivered his Spring Budget to the House of Commons yesterday. It’s anticipated to be one of the Government’s last fiscal announcements before a General Election takes place in less than a year’s time.

In the lead-up to the statement, there was uncertainty as to what the Chancellor could feasibly announce; the UK entered a ‘technical recession’ at the end of 2023, according to data from the Office for National Statistics (ONS), which resulted in a tightening of the purse strings.

Nevertheless, the Chancellor unveiled plans for a ‘UK ISA’, new British Savings Bonds from National Savings and Investments (NS&I) and another two percentage point cut to National Insurance.

A New British ISA

One of the main take-aways from this years’ Spring Budget is the plan to introduce a new ‘UK ISA’, which aims to “support savers and open up UK retail investment opportunities”.

All we know so far is this new ISA will allow consumers to invest in UK equity, while still benefiting from the same tax-free advantages as other types of ISAs. Furthermore, it will come with its own yearly allowance of £5,000, which is additional to the existing ISA allowance which will remain at £20,000 for the 2024/25 tax-year. The Government is set to consult on finer details.

“The intention of the British ISA is to grow our economy, reward investors and support British business,” commented Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

However, Springall was quick to highlight that savers “must be conscious of all the ISA options available to them and seek advice if they wish to invest in the stock market”.

NS&I British Savings Bonds

Meanwhile, the Chancellor also announced new British Savings Bonds from the Government-backed brand, NS&I, are set to go on sale in April 2024.

These new bonds will offer savers a fixed rate of interest over three years for investments between £500 and £1 million.

“NS&I is a trusted brand and those savers who want their money safe and perhaps to support UK businesses could well find these attractive,” said Springall.

Read full story: NS&I to launch British Savings Bond in April

With the interest rates yet to be decided, keep an eye on our three-year fixed bond chart to see how these accounts could compare to others on the market.

Alternatively, if you’re looking for a shorter-term bond, you’ll find top rates in excess of 5.00% AER on our one-year and two-year fixed charts.

Further cuts to National Insurance contributions

After reducing Employee National Insurance contributions (Class 1 National Insurance) in last year’s Autumn Statement from 12% to 10%, the Chancellor revealed a further two percentage point cut will come into effect from the 2024/25 tax year. This will see Employee National Insurance fall to 8%.

Self-employed National Insurance will see a similar cut, falling from 8% to 6%.

“When combined with the autumn reductions, it means 27 million employees will get an average tax cut of £900 a year and two million self-employed will get a tax cut averaging £650,” said Hunt.

However, Laura Suter, Director of Personal Finance at AJ Bell, highlighted this amount will vary depending on your salary:

“For low earners the saving is smaller, as less of their income falls in the band liable for National Insurance. But for higher earners there’s the potential to save up to £754 a year”.

A full list of measures announced in the Spring Budget 2024 can be found on the Government website.