One of the most amazing areas of recent tax reform concerns savings. The last coalition government led a huge change in the taxation of interest. Firstly, the ISA limit was increased from about £10,000 to a new high of £15,000 – and the whole amount can be invested in cash, if desired.

Switching freely between cash and other forms of investment, such as shares or funds, is now possible. The next move will be the introduction of the faculty to dip into ISA savings and then replenish the account within the tax year – without penalty or loss of the tax-free allowance.

Finally, from April 2016, basic rate taxpayers will receive an annual savings allowance of £1,000 and higher rate taxpayers £500 – worth up to £200 in either case.

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