Higher ISAs from next year (this year for 50+)

sly_dog_jonah

wadewadewade wrote: »

This is my main concern - I can't see myself withdrawing money from an ISA any time soon, and I really hope that I don't get hit hard on this because of people that do! (No offence to anyone that's planning on doing that, mind you )

You'll still have fixed rate Cash ISAs to choose from which should retain a premium rate, since you are locking the money away for a long period. I doubt it will have a massive impact on instant access rates to be honest. I'm sure there will always be providers who tier their interest rates for large high balances, e.g. currently Natwest have higher rates on their Cash ISA product for balances of £27k+. If you are unhappy to lock all your capital into long fixes, then you could split the cash between several different fixed rate products of varying duration.

BruceyBonus

I have now created and submitted a petition to the No 10 website.

We the undersigned petition the Prime Minister to introduce the new ISA subscription limits to everyone in October, not just those aged over 50.

In the 2009 budget by the Chancellor of the Exchequer, Mr Darling announced that the annual ISA subscription limit would be raised to £10,200 (of which £5,100 may be cash). He announced that people aged over fifty would receive the allowance in October, whilst the rest of the population would have to wait until April 2010, therefore losing out on an additional amount of £3,000 that could be saved tax free. This change also puts a huge administrative burden on the already struggling banks and building societies. We believe that it is unfair and discriminatory to introduce the higher allowance for one group of the population only, whilst there are many people under fifty who have been saving for their entire lives and use interest to supplement their income.

Link will be http://petitions.number10.gov.uk/under50sisa once the petition has been approved.

LesU

edda wrote: »

Perhaps now that HM Government own a good proportion of some banks, they're seeing things from a different point of view. :rolleyes:

No, they just don't have a clue what they are doing. No commercial concern would put a product together like this. Spend 6 months implementing something that applies to a small proportion of your customers, only to drop it 6 months later? Just to make it more interesting, make the change something that has never been done before and, possibly never again after this year. Standby for some serious leaning on the Government from the banks and institutions that run ISA's. This has come completely out of the blue for most of the interested parties and is purely a sales gimmick thrown in by a government that doesn't do control of finances very well.

Milarky

Why would it complicated? We already supply a D.O.B. for identification purposes. Any half competent organisation (I'm not implying some of the larger banks are, mind you!) could apply this simple check if a customer wants to make an additional deposit between 6 October this year and 5 April Next. A simple declaration could be taken that the person is at least fifty years of age and kept with the pre-October application and/or paperwork. If you've lied it would be the same as when opening two ISAs in the same year - it just get's put back.

david78

But for stocks and shares ISA how do they know its an extra contribution. I have already put £3600 into a cash ISA for this tax year and am drip feeding £300 per month into a stocks and shares ISA. However, the provider of the stocks and shares ISA will already allow me to put in another £1500 or £3000 with their current systems.

I turn 50 in January 2010, but cannot tell from the scant information released if this means I will get extra allowance from October 6, if I have to wait for my Birthday, or if I lose out on this extra allowance this tax year as I am not 50 now.

LesU

david78 wrote: »

But for stocks and shares ISA how do they know its an extra contribution. I have already put £3600 into a cash ISA for this tax year and am drip feeding £300 per month into a stocks and shares ISA. However, the provider of the stocks and shares ISA will already allow me to put in another £1500 or £3000 with their current systems.

I turn 50 in January 2010, but cannot tell from the scant information released if this means I will get extra allowance from October 6, if I have to wait for my Birthday, or if I lose out on this extra allowance this tax year as I am not 50 now.

Exactly. This doesn't just cover cash ISA's. Each day a report will have to be run checking that todays takings on every account hasn't exceeded the limit allowed UNLESS the lucky person has just had their 50th birthday the day before. Remember, this is all new checking, for every supplier of any type of ISA. This 'out-of-the-blue' new task will be in addition to any existing development schedules and must be completed in the next 6 months. It will be useful for 6 more months, then scrapped.
This at a time when a large number of back office software development personnel are being given their marching orders.
This is a new development for the banks, they been given a taste of how the government 'runs' its own IT projects.

oxenryd

LesU wrote: »

Exactly. This doesn't just cover cash ISA's. Each day a report will have to be run checking that todays takings on every account hasn't exceeded the limit allowed UNLESS the lucky person has just had their 50th birthday the day before. Remember, this is all new checking, for every supplier of any type of ISA. This 'out-of-the-blue' new task will be in addition to any existing development schedules and must be completed in the next 6 months. It will be useful for 6 more months, then scrapped.
This at a time when a large number of back office software development personnel are being given their marching orders.
This is a new development for the banks, they been given a taste of how the government 'runs' its own IT projects.

I like this post. What a mess it's going to be. I wonder if the banks will ask the government to reconsider the "over 50s only" as, as you pointed out, it will need to be scanned every day to see if anyone has turned 50.

21st Birthday. What you doing for your birthday? "Getting trashed" - was going to use drunk, but it's Britain ;-)
50th Birthday. What you doing for your birthday? "Paying into my ISA" lol

BruceyBonus

Petition is now live at http://petitions.number10.gov.uk/under50sisa/

Please sign if you believe it was unfair on both individuals and the banks/building societies to introduce the new allowance for over 50s in this tax year, whilst making everyone else lose out on the extra allowance for this year.

Also, please sign if you are over 50 and believe this was unfair.

Thank you very much

steveksullivan

Sorry to hijack this thread again (if thats the correct expression) but see Bruceys questions below and my earlier response - does anyone know or have any view on how this is going to be implemented?

Surely if we cant add to our existing cash ISA or open a new one under the current rules, the change is worthless if you have already opened your ISA for the current year?


Quote:
Originally Posted by BruceyBonus
Totally agree. And how is it going to be implemented on the bank/BS computer systems?

What about people who have opened fixed rate accounts already that don't accept further deposits? Will they be allowed to open a new account to save the difference?

And people who turn 50 this year? At least they'll get a birthday present from the Chancellor on their birthday.


Would love it someone can clarify the issue in Bruceys second para ..... probably a bit early though. Just about to open First Direct eISA with this years money .... wonder if they will take the extra after the date applicable for the over 50's

(oops just given my age away!!)

bob_a_builder

Very good post HERE which highlights the storm in a teacup nature of the whole thing from the savers point of view anyway.
Pointless giving over 50s an extra £4.50 rather than just introducing the new rate for the next tax year

Maybe the petition should read "stupid" rather than "unfair"