We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
ISAs here to stay
Options
ashm1
Posts: 234 Forumite
0
Comments
-
Oh good. Gordon's got his eye on New Labour's 4th term and realises that it hangs in the balance.0
-
Anyone know what "the distinction between mini and maxi ISAs will disappear" means?0
-
The government is currently consulting on the ISA regime.
What Ed Balls actually said in his speech re: ISA's and PEP's was:We have now come to the end of the internal review of the ISA that was promised back when the regime was introduced. I am grateful to the many of you here today who worked with the Treasury in contributing to this process.
The Government is committed to ISAs and we are keen to build on their success. I know that many of you have had concerns over the future of ISAs given that our current commitment runs only until 2010.
I can announce that we will make the ISA a permanent feature of the savings landscape. This open-ended commitment to the ISA will provide stability for savers and certainty for the industry – all of you who provide ISA products. It is a crucial development in the Government's savings strategy and will give us a firm platform on which to promote saving in the future. In addition, the Pre-Budget Report will confirm that the overall annual contribution limit will continue to be at least £7,000 for each individual.
Furthermore, in response to representations made by you – the industry – and others, we will implement a number of reforms designed to simplify the ISA regime and increase its flexibility for providers and savers.
It is our intention to remove the mini/maxi distinction within the ISA – as many of you have also requested. This will simplify the regime, removing barriers to saving by making it easier for savers to understand and engage with ISAs. It will provide greater flexibility and choice for savers – in line with our achievements in pensions simplification. And it will make ISA products cheaper and easier for the industry to provide. Allied with the open-ended commitment to the ISA, this will promote further saving, building on the success of ISAs since 1999.
We also intend to bring PEP schemes within the ISA wrapper. I can assure you that the funds held in PEPs will continue to enjoy tax advantages. But again, this will simplify the savings landscape – making it clear for all that ISAs are this Government's primary savings vehicle outside pensions. And it will enable us to reduce the administrative burdens on providers, leading to cost savings in future.
Regards
Sunil0 -
Hopefully it will mean that we can put £7K cash savings out of reach of the taxman.
But I wouldn't assume that yet.
I can't see Ball's statements about "entrenching" a "savings culture" being consistent with allowing the Cash ISA £3K limit to fall.0 -
The mini/maxi rule was over complicated. Having a 4/3k split or 7k into equity makes sense. I dont think they would move the cash allowance upto 7k as I believe the Cash ISA is more costly to the treasury than the equity ISA.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
-
It probably means you'll be able to invest up to 7K a year, tax free, if you put it all into equities, or just 3K if you put it all into cash.
So no mixing.
One or t'other. That'll encourage equity ISAs, which is the govt's preference, I'd have thought.0 -
ReportInvestor wrote:Oh good. Gordon's got his eye on New Labour's 4th term and realises that it hangs in the balance.
And what will happen if Labour don't get kept in?0 -
0
-
Couple of threads on this already:
http://forums.moneysavingexpert.com/showthread.html?p=3353100
http://forums.moneysavingexpert.com/showthread.html?t=295576
No commitment to raise limits though, so it looks like the real limit will continue to be eroded.
I'm concerned about plans to get rid of the mini/maxi distinction. Are there any providers that offer a decent cash component in the maxi ISA now?! The option of having a competitive cash and shares component in the same tax year could well be lost.
"The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.0 -
What does this mean? Let me be generous and assume for the sake of argument that Ed Balls isn't speaking in his normal eponymous manner....It is our intention to remove the mini/maxi distinction within the ISA
The 'mini/max distinction' simply means that ISAs could only have 'maxi' status surely? At the present time £4000 paid into a 'mini' equity ISA is already transferable into a 'maxi' holding from a previous year. So no change there....
On the other hand if you put even £1 into a Maxi ISA (which can't be a 'cash mini-ISA' by definition) you can't then subscribe to anything else.
The minimum change which I think could fulfill Ball's form of words (without conceding what we all want - which is full convertabilty between cash and investments with an implied cash ISA limit of £7000) is that opening a maxi ISA will not wipe out the existing cash mini ISA allowance for that year. This makes sense addressed to investment bods as they would be able to market (or cross sell even) their product on the basis that doing so does not restrict access to tax free savings. They could say: "Either save £4000 with this product and save upto £3000 in the cash ISA of your choice OR more than £4000/less than £3000 - the choice is yours!"
However, it is illogical to maintain this 'oil/water' distinction between cash and shares after the initial split in the investment/savings is made. The option to convert to cash - and the superficially equally attractive option to convert cash into shares will just be something people will keep pressing on govt until they say exactly what they mean by this....
Look at the decision to extend ISAs to 2009 and how that was extracted. GB left it to the last possible moment to comfirm that they would continue. Thus I would not expect early clarification here since Balls only reads from a script written by Brown (i.e. he doesn't really need to know yet either).....under construction.... COVID is a [discontinued] scam0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.1K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.6K Spending & Discounts
- 244.1K Work, Benefits & Business
- 599.1K Mortgages, Homes & Bills
- 177K Life & Family
- 257.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards