HC Deb 09 February 1998 vol 306 cc33-4W
Mr. Lilley

To ask the Chancellor of the Exchequer what estimate he has made of the effect on tax revenues of setting the cap on tax exempt savings held in individual savings accounts at(a) £30,000, (b) £50,000, (c) £100,000, (d) £150,000 and (e) £250,000. [19704]

Mr. Geoffrey Robinson

[holding answer 8 December 1997]TESSAs and PEPs will cost about £l½ billion a year by April 1999. Under the proposals set out in the consultation document, funds currently held in TESSAs and PEPs will be able to transfer into individual savings accounts, subject to the overall £50,000 limit. People with PEPs and TESSAs whose value exceeds £50,000 will be unable to transfer the excess to ISAs.

The estimated cost to the Exchequer of these proposals is broadly similar to the combined cost of TESSAs and PEPs, but estimates are sensitive to assumptions made eg on the level of take up. The effect on cost of varying the level of the cap will depend on the way in which people decide to invest the balance of their investments.