Barratt launches first ever payroll ISA

Barratt, the biggest house builder by volume in Britain, has selected Legal & General to provide the UK's first Company ISA (CISA) plan for employees, the Barratt ISA. 

A Company ISA (CISA) provides employees with the same tax efficiency as a personal ISA, but with the added benefits for employees of much lower management charges and the convenience of making payments from payroll deductions. For employers it brings greater employee engagement from providing relevant benefits, heralding a new dimension of added convenience in workplace benefits. 

The Barratt ISA, which is a stock and shares ISA, has an annual allowance of £10,200 for the 2010/2011 tax year. It has no income tax or capital gains tax, enabling employees to potentially save substantially on investment returns.

Jayne Mee, People and Customer Experience Director at Barratt Developments PLC, said: "We are continually looking to improve the benefits and rewards we offer to our employees and that is why we are excited to be launching the first ever Corporate ISA.  They will be able to take advantage of low management fees and make payments from payroll deductions as part of this highly competitive way of saving for the future."

Chris Noon, Partner at Hymans Robertson, which advises Barratt regarding its benefits strategy said, "Corporate ISAs offer employees the convenience of regular saving through the payroll along with the benefits of lower fees through Company negotiated rates and improved governance.  We expect such arrangements to become a regular feature of leading employers' benefits provision, as companies' benefits strategies evolve to suit the needs of today's employees.

"Recent changes to ‘high earners' pension taxation has made such products more attractive, as there could be an advantage from employees being able to allocate employer pension funding to an ISA rather than to their pension scheme.  However, they are equally relevant for any employees with short term savings needs such as saving for a house deposit."

Tony Filbin, Legal & General's Managing Director, Workplace Savings said, "Regular contribution CISAs are set to revolutionise participation in company saving schemes. It is now possible for employers to take a huge step to drive effective workplace savings forward."

The Barratt ISA is the first regular savings ISA plan to be launched following the increase in ISA allowances, which came into force on 6 April this year. The CISA invests in a choice of ten funds that allow employees to save up to £10,200 per year in a stocks and shares ISA.

Tony added; "We all appreciate the importance of starting saving as early as possible as your money has longer to enjoy investment growth. The major benefit of the CISA is its flexibility. Employees can adjust the rate they save, transfer money in from other ISA savings and access their money easily when they need it. Our CISA will also enable employees to take a savings holiday or go online to adjust the amount they save to match what they can afford."