IMA expresses concern over Budget's tax plans

The Investment Management Association (IMA) has given cautious welcome to yesterday’s Budget.

Launched in parliament yesterday by chancellor of the exchequer Alistair Darling, the Budget contained a number of proposals directly affecting private investors.

The annual Isa limit is to be raised from £7,200 to £10,200 from 2010/11 - although people aged over 50 years old can gain access to the raised threshold this financial year.

People earning over £150,000 a year will also face an increased tax burden as a result of the Budget.

Pensions relief for these contributors has been scrapped - while income tax is also set to increase from 40p in the pound to 50p from next April.

Commenting, Richard Saunders, chief executive of the Investment Management Association, said: ’We need to see further details about the proposed reductions in pensions tax relief. But the chancellor himself stressed in his speech the importance of saving for retirement.

’It would be perverse therefore if the overall effect of the Budget measures were a net reduction in incentives to save.’

Mr Saunders added that the Isa change was a ’welcome fillip for savers’.ADNFCR-2318-ID-19135777-ADNFCR