Cameron to scrap taxes on savings (basic rate only)

arealhighlander

Cameron isn't SCRAPPING anything. He can make all the promises and spout whatever he wants - he cannot do any of it, he is not in the Government!

LesU

Has anyone worked out how the figure of £4.1 billion has been arrived at?
By the time any of this can stand a chance of happening the average savings rate is going to be down at about 2%. If you work back using 20% tax for around 26 million BRT's then every basic rate payer has an average holding of about £40,000! That sum doesn't include money held in ISAs.

ed123_2

.....Brown & Darling will be flung out on their ear next year, people are fed up with thier nanny state and control freakery,millions are wasted in wars, benefits for all & sundry from all over the world....its about time that the people who do the right thing, save, live within their means and who do not get into credit car/mortgage & other debt. This government has changed the timelimit for bankruptcy from 3 to 1 years and have just cut income support from 39 to 13 weeks for income support to cover mortgage interest payments. They are also creating future inflation which again will hit savers...who have done the right thing & lived within their means..

Milarky

LesU wrote: »

Has anyone worked out how the figure of £4.1 billion has been arrived at?
By the time any of this can stand a chance of happening the average savings rate is going to be down at about 2%. If you work back using 20% tax for around 26 million BRT's then every basic rate payer has an average holding of about £40,000! That sum doesn't include money held in ISAs.

The overall package includes rises in tax allowances for pensioners too

He plans to scrap taxes paid by basic rate taxpayers' on savings interest and raise the level of non-taxable income for pensioners by £2,000 a year.

The amount of income that people aged between 65 and 74 would receive tax-free would rise from £9,490 to £11,490 while for the over 75's, tax-free allowances would rise to £11,640.

This would enable a 65-year old with £14,000 in pension income to save £400 a year

That would reduce the amount attributable to savings interest per se

From the Grauniad:

...there are around 18 million people who receive interest from savings who would benefit.

Given that the Tories say the tax cut would cost £2.6bn, this suggests an average saving of £144 a year. But this figure is almost certainly misleading because some people will have disproportionately large sums saved up. The Tories admit that some individuals could save as much as £7,200 from their tax cut, although they have not said how many.

Labour say that, according to Treasury figures, anyone with an income worth less than £30,000 a year will benefit by less than £5 a year.

£144 x 250 (i.e. (1/5) x(1/2.0%) ) gives average savings balances for all BRTs of £36,000.....

It depends on which savings rate is used of course.

I]Labour's 'key workers' would appear to have just £1250 in savings by this measure - even though they earn £2500 a month[/I

bristolleedsfan

casper_uk wrote: »

No once again people fail to grasp what this is about. This will only work for people paying the basic tax rate!.

U mean "person", rest of us did understand what it is about.

Hungerdunger

Just a thought - as a general rule Banks and Building Societies offer whatever rates they have to in order to attract the funds that they need.

If tax on savings is abolished, then it will automatically become more attractive to save, but the banks may not need all these extra savings and will cut the rates they offer, so that we'll be back to square one. Or am I missing something?

ManAtHome

Hungerdunger wrote: »

Just a thought - as a general rule Banks and Building Societies offer whatever rates they have to in order to attract the funds that they need.

If tax on savings is abolished, then it will automatically become more attractive to save, but the banks may not need all these extra savings and will cut the rates they offer, so that we'll be back to square one. Or am I missing something?

The missing bit is that for the next few years at least, the bank's will need as much as they can get from retail deposits (UK savers). That's where this is probably more effective than the loony VAT cut - if the cash is spent, it helps the economy, if it's 'hoarded', it helps bank liquidiy so they can lend more.

RayWolfe

dougs wrote: »

Jeez! If he says nothing he gets accused of having no policies and being the "do nothing" party. If he says something he gets accused of "blatant electioneering".

Ahh, never mind. Pr'apse next time he'll be listened to, poor luv.

RayWolfe

ManAtHome wrote: »

That's where this is probably more effective than the loony VAT cut - if the cash is spent, it helps the economy, if it's 'hoarded', it helps bank liquidiy so they can lend more.

There's me thinking that if you get more cash for saving, you'll save more cash. I must be daft!

theAnarchist

ed123 wrote: »

.....Brown & Darling will be flung out on their ear next year, people are fed up with thier nanny state and control freakery,millions are wasted in wars, benefits for all & sundry from all over the world....its about time that the people who do the right thing, save, live within their means and who do not get into credit car/mortgage & other debt. This government has changed the timelimit for bankruptcy from 3 to 1 years and have just cut income support from 39 to 13 weeks for income support to cover mortgage interest payments. They are also creating future inflation which again will hit savers...who have done the right thing & lived within their means..

I agree. This is what I did and labour have taken me to the cleaners!!!

My savings are have suffered badly.