New British Isa and British Savings Bonds announced in Spring Budget

Two new savings products – the British Isa and British Savings Bonds – have been announced in the Spring Budget today.

After months of speculation stemming back to November's Autumn Statement, Chancellor Jeremy Hunt has confirmed plans to introduce a new stocks and shares Isa that will exclusively focus on UK-listed companies.

Savers opening a British Isa (also being referred to as a 'UK Isa') will be rewarded with an additional £5,000 allowance on top of the existing Isa allowance of £20,000.

Speaking in the Commons, Hunt said those opening British Isas would 'benefit from the growth of the most promising UK businesses'.

New British Savings Bonds will also be launched from April this year, allowing savers to lock their cash away for three years on a fixed interest rate.

• Find out more: key announcements from the Spring Budget

British Isa launch date yet to be announced

This new type of Isa joins a host of existing Isa types including cash, stocks and shares, lifetime, junior, Help to Buy and innovative finance Isas.

Savers can already save up to £20,000 tax-free annually across the existing types of Isa.

However the British Isa announced today provides a separate, additional £5,000 allowance which is solely for investment in UK assets. 

The date when British Isas will become available has not yet been announced, with the government promising to consult on the details.

• Find out more: best cash Isa rates in March 2024

British Savings Bonds offer three-year guaranteed rate

Launching next month, this savings product will be available through state-owned bank and premium bonds provider NS&I, and offer a guaranteed interest rate for three years.

NS&I hasn't yet confirmed what the rate will be but says it is 'intended to be priced mid-market in relation to similar products, in line with NS&I’s requirement to balance the interests of savers, taxpayers and the broader financial services sector'. It says it will update its website soon with more information.

The bonds will be available to people investing between £500 and £1m, and will take the form of Guaranteed Growth Bonds and Guaranteed Income Bonds, which were last available in 2019.

The British Savings Bonds will go on sale in early April and NS&I says it intends for them to be available for an 'extended period of time'. 

In common with all other savings and investments held at NS&I, British Savings Bond holders' money will be backed by the Treasury. 

• Find out more: are premium bonds worth buying?

What was missing for savers in the Budget?

A number of rumoured savings changes failed to materialise in the Chancellor's speech today. 

• Lifetime Isa limit: The government has continued to resist pressure to raise the house price limit on a Lifetime Isa (Lisa) to keep up with house prices. Lisas can currently be used to buy properties costing up to £450,000, but average house prices in some parts of the country are now far higher than that. This has led to some Lisa savers being penalised when withdrawing their money to buy a home. The situation is set to continue for now.
• Isa reform: With a general election looming, the government has avoided calls for a widespread simplification of the Isa system. Indeed, introducing a new Isa type has arguably increased complexity.

What is an Isa?

The term Isa stands for 'individual savings account', and allows you to save tax-free into a cash savings or investment account.

Isas are offered by banks, building societies, insurers, asset managers and National Savings and Investments (NS&I).

In recent years, new types of Isa have been unveiled, and there are now five different types of adult Isa, plus Junior Isas for children aged 17 and under.