Cameron makes savings tax pledge

neverdespairgirl

nickmason wrote: »

No of course - it was more the "outing" of me as an Oxford toff because I was involved (marginally) in the Conservative Association and was president of the Oxford Union.

When were you involved in the OU? Did you take part in IV debating?

nickmason

neverdespairgirl wrote: »

When were you involved in the OU? Did you take part in IV debating?

98-01 (was a vaguely "mature student"). Organised a couple of IVs, but never took part. I guess I was involved for my dark skills of politics (or the boring of actually getting stuff done), rather than any lofty skills of rhetoric and debate. In case you hadn't noticed.

overlander

I think some people are missing the point, there are lots of people banging on about people who cannot save. Give me a break, i can guarantee that 60% of the ohhhh i cannot save brigade have a house full of tack from china mortgaged up to their eyeballs. Yes this ohhh i cant save can be sen in every shopping centre with not enough arms to carry all their tack bought on the plastic.

It is these type of people that Cameron is hinting too look there is another way out of this mess, save do not buy tack save, its not rocket science. Yes there is actually a large portion of people who do not earn a massive amount and save how is this possible. Simple they never mortgaged themselves to the hilt and never bought tons of tack from China.

Masomnia

He should just say that then, rather than come up with publicity stunts.

When people cotton on that this means £7 extra for every £1000 saved (I assume an AER of 3.5%) they may not warm to it quite so much. Even more so when in reality it's every thousand saved over £3,600.

overlander

I agree the actual policy is not great, but its a line drawn in the sand. Cameron is saying that look people save and we will get out of this. But Broon is saying look people keep piling on the debt and buy the tack. So now we have a choice.

nickmason

Masomnia wrote: »

He should just say that then, rather than come up with publicity stunts.

I don't think this is a publicity stunt - I think it's trying to set a philosophical mood.

When people cotton on that this means £7 extra for every £1000 saved (I assume an AER of 3.5%) they may not warm to it quite so much.

or a 25% increase in savings income from £28 to £35. I'd notice that. And as I said earlier, much of that increase will probably only serve to stop the capital depreciating in real terms.

Even more so when in reality it's every thousand saved over £3,600.

Why? What have I missed?

SGE1

nickmason wrote: »

The point of this policy is it moves the default - it sets in mind the concept that savings can grow untaxed, and it makes that open to everyone. It's that sort of clarity that is needed to encourage people to save.

But that implies that taxes, and the so called lack of clarity they bring, are the reason behind the lower classes' lack of saving. Which again, isn't true. I doubt that people who don't know what an ISA is, are conscious that should they start saving, the rate they receive will be lower than the AER rate advertised. I honestly don't buy that. I appreciate that this policy is an attempt to glorify savings, and give the impression that they're more worthwhile, but I don't think it'll be effective, and nor is it well targeted or thought-out.

nickmason wrote: »

For starters, even you would agree I'm sure that any interest paid below inflation should be tax-free? Or do you honestly think we should be taxed "on our losses"?

Inflation's a tricky thing though isn't it - which figure are you talking about? RPI?

SGE1

nickmason wrote: »

98-01 (was a vaguely "mature student"). Organised a couple of IVs, but never took part. I guess I was involved for my dark skills of politics (or the boring of actually getting stuff done), rather than any lofty skills of rhetoric and debate. In case you hadn't noticed.

Bet if I told you I was also an OUCA member in the past, you wouldn't believe me

Rochdale_Pioneers

overlander wrote: »

I think some people are missing the point, there are lots of people banging on about people who cannot save. Give me a break, i can guarantee that 60% of the ohhhh i cannot save brigade have a house full of tack from china mortgaged up to their eyeballs. Yes this ohhh i cant save can be sen in every shopping centre with not enough arms to carry all their tack bought on the plastic.

It is these type of people that Cameron is hinting too look there is another way out of this mess, save do not buy tack save, its not rocket science. Yes there is actually a large portion of people who do not earn a massive amount and save how is this possible. Simple they never mortgaged themselves to the hilt and never bought tons of tack from China.

The people without savings are already covered with a tax free savings allowance. How many of them are likely to manage to save more than this to benefit from this?

nickmason

SGE1 wrote: »

But that implies that taxes, and the so called lack of clarity they bring, are the reason behind the lower classes' lack of saving.

Sorry that was clumsy of me - taxes aren't unclear, tax credits etc are.
And the reason is the cultural one; the forgotten idea of balancing books.

Which again, isn't true. I doubt that people who don't know what an ISA is, are conscious that should they start saving, the rate they receive will be lower than the AER rate advertised. I honestly don't buy that. I appreciate that this policy is an attempt to glorify savings, and give the impression that they're more worthwhile, but I don't think it'll be effective, and nor is it well targeted or thought-out.

Respectfully, I genuinely do think it will have an effect; both culturally and individually. And there's certainly no way we're going to work this debate out!

Inflation's a tricky thing though isn't it - which figure are you talking about? RPI?

Oh, I don't know. I was just making the point that income tax is charged on nominal interest, rather than real - as such it can often be a tax on a loss-making asset. Which is rather a disincentive to save.