Tax cuts for savers

JP45

soulsaver wrote: »

Well if the effect is negligible, then he may as well give it then and you won't be bothered about it....

Ok, I accept the point. If the benefit to savers and hence the cost to the exchequer is negligible then it won't add significantly to the public debt. But I still have a couple of reservations.

1. That the above only holds as long as the tax exemption is strictly time limited. If it were to continue once interest rates start rising again then the cost would rise accordingly. And would the government not then face a potential backlash from savers demanding that the tax exemption should remain in place.

2. If the benefit to savers is negligible then it is nothing more than a pointless smoke and mirrors initiative, of the kind that is becoming depressingly familiar under this government.

lukekelly_2

JP45 wrote: »

I think it must now be clear to just about everyone that Brown has a deeply flawed personality. He seems quite incapable of accepting responsibility or blame for anything.

It's not a flaw in his personality but a feature (arguably a flaw) of our political system. If he gave a genuine and sincere apology, not just some weasel words, then he'd run a high risk of writing the Tories' campaign posters for them: "Brown - I'm (partly) responsible for the recession." He may or may not believe privately that he has some responsibility. He certainly though wants to be re-elected. As such he won't apologise unless he thinks he has no other choice. We don't vote for the honest types who apologise, who admit their serious mistakes and who don't dig for dirt on their opponents and so they don't get elected.

Geoff_W

If the 'help for savers' in the budget turns out to be a reduction in the tax paid on interest, then a lot of people (like me), who have arranged their savings to take advantage of a non-taxpayer's allowance (my wife), won't benefit at all.

Again, those of us who have been prudent will be disadvantaged.

Geoff

xyz123

Geoff_W wrote: »

Again, those of us who have been prudent will be disadvantaged.

Geoff

How will you be disadvantaged? if anything from now on you have the chance to save the money in your name...

I can not see any disadvantage in this....if anything it will help rest of us (with everyone in house being a tax payer) to be in line with people like you who have one person of household being a non tax payer...

whu

I think the goven should force any banks that have had state aid to provide higher savings rates for those over 65 (and I am not one of them) as they often rely on the interest to supplement their pensions - or alternatively let over 65's take the same rates as everyone else but if they are a 20% tax payer they should pay no tax and if a 40% tax payer they should pay 20% - we should remember that these people have tried to be prudent by saving all their lives and now deserve a bit of assistance - take the politics out of it and just do what is fair

CHR15

xyz123 seems to think we only have savings for a Rainy Day so should be spending our capital.

Any movement on Tax on Savings is going to be completely negligible in terms of £'s and pence with interest rates as they are.
It is all a publicity stunt to gain political points.

Broadback

I think the the German approach is much better. Instead of subsidising foreign car companies direct they give money to anyone who scraps an old inefficient car and gives them a lump sum towards replacing it with a new "green" car. similarly they encourage businesses to retain staff during the tough times by giving aid to workers when the employer places them on short time. This way the employer, employee and government share the cost, then when the economy picks up the skilled workers are still available,

xyz123

CHR15 wrote: »

xyz123 seems to think we only have savings for a Rainy Day so should be spending our capital.

quote]

I am not sure on what basis you concluded that....

Savings and capital are two different things all togather. please do not confuse them......Re-read my post carefully to understand what i meant.

i was saying that just becasue there is not a huge interest income on your savings, one shouldnt stop saving as savings are an absoulte lifeline in rainy days....

CHR15

xyz123 wrote: »

savings is just as it says savings, it is there for a rainy day and not just if you get a decent return

I got it from that bit ^^^ seems quite plain what you mean.

People have spent years carefully managing money so they can use the Interest to supplement regular income, not to chip away at the capital lump until it whittles down to nowt.

The reward for careful financial management gets less each day.

lukekelly_2

remember that these people have tried to be prudent by saving all their lives and now deserve a bit of assistance - take the politics out of it and just do what is fair

Why should people be rewarded for doing something in their own interest? Is having savings not advantage enough over those who didn't or couldn't save? I'd much prefer thousands of pounds in the bank to empty coffers. It's an absurd feature of an entitlement-driven society that people demand additional reward from the rest of society for doing something entirely in their own interest anyway.

xyz123 seems to think we only have savings for a Rainy Day so should be spending our capital.

There are times when it's entirely sensible to spend capital. My partner's parents calculated how much they needed stashed away in case of emergency and how much they could spend a month if they wanted the rest to last 20 years. Far better that they spend and enjoy the money they saved up than refused to heat their home properly in order to preserve money that they will have no use of in a couple of decades.