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Spend & Save

Simon Read: An Autumn Statement that changed little


The Chancellor's winter briefing has become a bit of a focal point on the financial calendar. A few months before the annual Budget, it's a chance to float ideas, set tax rates and report back on how well policies are succeeding.

But this week's statement by George Osborne proved to have very little impact. In fact it's the things he didn't do that have proved most interesting.

For instance, he failed – once again – to grab the opportunity to equalise the unfair rules surrounding child trust funds despite holding a consultation this year into the idea of allowing holdings to be transferred into Junior ISAs.

That's the only fair option as around six million kids are stuck with CTFs that are paying hardly any interest. That's because they were replaced in 2011 by junior ISAs, which pay up to 3.5 per cent.

Danny Cox of Hargreaves Lansdown said the Chancellor's inaction was a "missed opportunity".

"Running two separate schemes adds complexity and doesn't encourage a savings culture," he said. "The child trust fund is in terminal decline, with providers offering lower rates and worse choice than is available from junior ISAs."

Mr Osborne also failed to change the rules to allow the full ISA allowance to be saved in cash ISAs, as many had hoped. He also still left the anomaly that while you can switch your money from a cash ISA to an equity ISA, you can't do the reverse.

Switching to cash out of equities as you approach retirement can be a good idea as it reduces your risk at a time when you may need to rely on your nest egg. Making ISAs more flexible to allow that must be put back on the Chancellor's agenda.