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[MSE Guy]

This thread is to disuss the following news story:

Cash Isa limit to be raised

[sly_dog_jonah]

Should this be on the ISA sub-board? Probably worth merging with the thread already discussing this news.

[laffer]

Who was the troll who had the signature 'Darling does nothing for savers' etc.

[hotkee]

laffer what exactly has he done?

If you are over 50, and have some money, you can stuff more money into the bank's coffers in the form of an ISA allowance.

And for everyone else - oh stuff you - wait till April 2010.

Labour - why dont theiy just announce an election and disappear for the next 30-40 years.

[JMW77]

This is really good news shame we have to wait till next year though,but time for everyone to close a couple of credit cards and clear some debts ready to save hard next year.

[Tozer]

Originally Posted by JMW77

This is really good news shame we have to wait till next year though,but time for everyone to close a couple of credit cards and clear some debts ready to save hard next year.

Not really great news. Isn't it just the government catching up with inflation after not increasing the limits appropriately in past budgets?

[EdInvestor]

Originally Posted by hotkee

If you are over 50, and have some money, you can stuff more money into the bank's coffers in the form of an ISA allowance..

This is a response to the repeated whingeing in the press and on the internet about the plight of retired people who are living off the interest (or lack of) on their savings.Nobody has been that bothered about younger people, who have mostly already benefited dramatically from the reduction in mortgage rates.

[hotkee]

Yes but not all of us are over 50 or have mortgages or a job (so do not appear on their nonsense jobless figures)...so this increase in isa allowance is nothing - absolutely nothing ...meaningless.

[5fEtsd9Hs1LOR3SQftY9]

Thanks for almost nothing!
At least this year for the over 50s cash ISA:
(5100 -3600)*6/12*20%*3.5%= a measly £5.25.
and of course will be swallowed up by petrol and alcohol increase.

[apt]

In the short term the increased allowance makes relatively little difference because of the low interest rates. But cumulatively it is a significant change, and the value will be even greater to those who might be affected by 50% tax and lower tax rebates on pensions. Whether we can trust politicians to keep their taxing hands off ISA savings as they keep growing is another matter.

[Tozer]

Originally Posted by 5fEtsd9Hs1LOR3SQftY9

Thanks for almost nothing!
At least this year for the over 50s cash ISA:
(5100 -3600)*6/12*20%*3.5%= a measly £5.25.
and of course will be swallowed up by petrol and alcohol increase.

Isn't it interest of £52.50 for this year?

[sly_dog_jonah]

Originally Posted by Tozer

Isn't it interest of £52.50 for this year?

Nope the original poster is correct, the effective tax relief by using the extra allowance for 6 months (Oct 09-April 10) in a typical 3.5% account is ~£5.25 for a lower rate taxpayer. The benefit for higher rate taxpayers is double of course.

[LesU]

Originally Posted by Tozer

Isn't it interest of £52.50 for this year?

No, because it can't be put in until October. So you have to halve the £52.50, assuming you are getting 3.5%, which is generous. But of course you could be getting 3.5% in a taxable savings account, in which case all you are being given is 20% of the interest.
Why such a complex arrangement for such a small reward to so few people? I would be surprised if all the ISA companies even offer this extra for the sake of waiting 6 months and letting everyone have it. Especially as the banks are shedding staff like fury, particularly from the back office development departments.

[Lokolo]

Yes but in the longrun having an extra £1500 a year will be beneficial. It may not be a huge impact but as Tesco say, every little helps.

[Daftasa]

Are the over 50s supposed to be grateful for their good fortune?
Does not the paltry sum reduce even further to £2.25, if you put the £1500 in a 1 year fixed at 3.9% now and pay the tax (shame on you)?

As APT says it is not a short term thing and using up the annual allowance is the important thing.

I see little point in distinguishing between saver age groups. Surely the document changes, the Admin of and/or system changes required to cope with checking ages is going to add to overheads and the general chaos in some banks.

[Jimmyc]

Thanks Darling, £1500 extra its better then nothing.

ISA's are more competitive at the minute, they normally have a higher rate then most other cash savings accounts at the minute

[davenpearsall]

would have been nice to have it now to be honest!

[opinions4u]

I see little point in distinguishing between saver age groups. Surely the document changes, the Admin of and/or system changes required to cope with checking ages is going to add to overheads and the general chaos in some banks.

Too right it will!

More cost for those taxpayer owned banks!!

As for the excluding under 50s thing, whatever happened to age discrimination legislation in this country?

[Milarky]

Originally Posted by opinions4u

As for the excluding under 50s thing, whatever happened to age discrimination legislation in this country?

I assume HMG regulations are always exempt? There is plenty of ageist legislation (lower minimum wage for under 21s etc) so that angle must be covered.

Bad practice? yes. 'Illegal'? no.

[Nick_C]

The whole system of ISAs is failing, because Banks and BSs are using ISAs to pay lousy rates of interest. With 4% available in taxable accounts, its hard to find an ISA that is worth while.

Perhaps they should allow you to self select any account as an ISA? Fill in a form to claim relief, at the end of the year, and make the lender pay the relief at the end of the year provided ISA rules had been maintained. Using NI numbers, duplicate accounts could still be weeded out on a central database by HMRC.