New ISA Allowance

Phaelok

Does anyone know with the next limit taking effect from the next tax year, can the government then decide to reduce the annual ISA limit back down? say in a few years time?

Thanks

Paul_Herring

The banks are absolutely preying on this advice by offering abissmal rates of interest on cash isa's. Even with new money it's easy to beat the best isa with a nett figure.

Though it should be pointed out that this is only likely to be short term - if you're only expecting to have the cash ISA for a couple of years, it's probably not worth having an ISA, however for longer term, when interest rates start going up again and you've accumulated more than a few years' worth of ISA it'll make a substantial difference.

Paul_Herring

Phaelok wrote: »

Does anyone know with the next limit taking effect from the next tax year, can the government then decide to reduce the annual ISA limit back down? say in a few years time?

There's nothing to stop them. In fact they could abolish it altogether - i.e. including removing all those previous savings from the tax shelter.

It wouldn't be at all popular, but they could do it.

Myrmidon_J

cyclonebri1 wrote:

Exactly, every money saving site and every advisor goes with the standard "use your tax freesavings allowance 1st". The banks are absolutely preying on this advice by offering abissmal rates of interest on cash isa's. Even with new money it's easy to beat the best isa with a nett figure.

"Use your tax-free savings allowance first." - this is good advice (in my opinion).

Although rates are not particularly attractive at present, remember that the Bank of England base rate is just 0.50% - and that, in today's budget, the Chancellor forecast that inflation (measured by the RPI) will in fact drop to -3.00% by September of this year. (Leaving aside the question of whether or not he is correct to make such a prediction!)

It may be "easy" to beat the best ISA rate with a net figure from another (taxed) account, but if you do not use your ISA allowance this year, it is impossible to make up the difference later.

As Paul_Herring said, ISAs work best over the long-term, where they can later be used to (potentially) deliver a tax-free income.

ipri

Can I add the "extra " to my isa this October?

ginvzt

I am really surprised by this age discrimination - if I am not 50, so I can't save money? That is what basically government is saying... And I thought that there could be no discrimination on the grounds of sex, age, religion...

Lokolo

ginvzt wrote: »

I am really surprised by this age discrimination - if I am not 50, so I can't save money? That is what basically government is saying... And I thought that there could be no discrimination on the grounds of sex, age, religion...

I'm 20 and I can earn less than 21 year old on minimum wage. I don't get a free bus pass because I'm young etc.etc.etc. Who cares.

ipri

ginvzt wrote: »

I am really surprised by this age discrimination - if I am not 50, so I can't save money? That is what basically government is saying... And I thought that there could be no discrimination on the grounds of sex, age, religion...

Bet ya happy not to pay 50% tax!!...

adambro

How many threads can we have on one subject?

Lokolo

adambro wrote: »

How many threads can we have on one subject?

Is that a challenge?