People would be given more flexibility to build up their tax-free savings pots during the course of a lifetime under Policy Exchange proposals to introduce a Bonus ISA (BISA). The BISA would be offered to anybody who is unable to use their full annual tax-free savings allowance (currently set at £15,000). People would be given the power to roll over any unused portions of their existing ISA allowances into their Bonus ISA account. There would be a cap – initially £10,000 – on the total amount that customers could roll over into their BISA. This would allow the Exchequer to control the cost of introducing the new scheme.
People who experienced a one off financial windfall such as an inheritance, house sale or redundancy payment would benefit from being able to save a much greater amount into a tax-free account within a single year. Alternatively they could utilise the BISA over a number of years until the cap is reached.