Osborne claimed on Wednesday that 17 million people – 95% of savers – will pay no tax on their savings as a result of the budget changes.
"The new allowance will offer savers the ability to shop around and simply use the very best savings rates they can find – this could well be a combination of Isas and non-Isas, including high interest current accounts.
But he is trading on the financial ignorance of most savers, who at best may pay more tax and end up poorer in later life, and at worst fall prey to all manner of tricksters and fraudsters promising double digit returns on plausible but fictitious investments.
Maike Currie, associate investment director at Fidelity Personal Investing, said that while removing the income tax on interest earned on cash "makes for a great headline", it would do little for cash savers who had to contend with paltry rates.
As for all the plans to rebalance the economy, to change the Brits from savers and spenders … no sooner does the chancellor mouth them then they are as good as forgotten.
Waze allows drivers to dodge traffic queues and FeeX offers savers the ability to cut down their investment fees.
For savers who don't want to lock their money away, "instant access" cash Isa rates have fallen to pitifully low levels.
The bad news is that the new rates only apply to new customers, not existing savers who took out a fixed-rate Isa before yesterday.
But it's evident that for millions of cash Isa savers the benefits of "tax-free" are falling more into the hands of the banks than customers.
Savers wanting an early rise in interest rates had their hopes dashed on Wednesday, as it emerged that the two members of the Bank of England's monetary policy committee who have repeatedly backed higher borrowing costs have changed their minds.
But from autumn this year savers can take money out, and as long as they replace it within the tax year the tax status will not be affected.
