Budget 2009: Cash Isa Limit Increased

sly_dog_jonah

Tozer wrote: »

Isn't it interest of £52.50 for this year?

Nope the original poster is correct, the effective tax relief by using the extra allowance for 6 months (Oct 09-April 10) in a typical 3.5% account is ~£5.25 for a lower rate taxpayer. The benefit for higher rate taxpayers is double of course.

LesU

Tozer wrote: »

Isn't it interest of £52.50 for this year?

No, because it can't be put in until October. So you have to halve the £52.50, assuming you are getting 3.5%, which is generous. But of course you could be getting 3.5% in a taxable savings account, in which case all you are being given is 20% of the interest.
Why such a complex arrangement for such a small reward to so few people? I would be surprised if all the ISA companies even offer this extra for the sake of waiting 6 months and letting everyone have it. Especially as the banks are shedding staff like fury, particularly from the back office development departments.

Lokolo

Yes but in the longrun having an extra £1500 a year will be beneficial. It may not be a huge impact but as Tesco say, every little helps.

Daftasa

Are the over 50s supposed to be grateful for their good fortune?
Does not the paltry sum reduce even further to £2.25, if you put the £1500 in a 1 year fixed at 3.9% now and pay the tax (shame on you)?

As APT says it is not a short term thing and using up the annual allowance is the important thing.

I see little point in distinguishing between saver age groups. Surely the document changes, the Admin of and/or system changes required to cope with checking ages is going to add to overheads and the general chaos in some banks.

Jimmyc

Thanks Darling, £1500 extra its better then nothing.

ISA's are more competitive at the minute, they normally have a higher rate then most other cash savings accounts at the minute

davenpearsall

would have been nice to have it now to be honest!

opinions4u

I see little point in distinguishing between saver age groups. Surely the document changes, the Admin of and/or system changes required to cope with checking ages is going to add to overheads and the general chaos in some banks.

Too right it will!

More cost for those taxpayer owned banks!!

As for the excluding under 50s thing, whatever happened to age discrimination legislation in this country?

Milarky

opinions4u wrote: »

As for the excluding under 50s thing, whatever happened to age discrimination legislation in this country?

I assume HMG regulations are always exempt? There is plenty of ageist legislation (lower minimum wage for under 21s etc) so that angle must be covered.

Bad practice? yes. 'Illegal'? no.

Nick_C

The whole system of ISAs is failing, because Banks and BSs are using ISAs to pay lousy rates of interest. With 4% available in taxable accounts, its hard to find an ISA that is worth while.

Perhaps they should allow you to self select any account as an ISA? Fill in a form to claim relief, at the end of the year, and make the lender pay the relief at the end of the year provided ISA rules had been maintained. Using NI numbers, duplicate accounts could still be weeded out on a central database by HMRC.

gcw84

It is absolutely unforgivable that this increased limit is being introduced for over 50s first.

What's age got to do with it?
Why shouldn't it be introduced across the board?

I appreciate that it's not going to make a massive difference initially, but the cumulative effect will be greater, and I don't see the relevance of age.

Yet again, students like me get a poor deal whilst the older residents of the country get endless help with one scheme and another.

I shall be writing to my MP to protest this announcement, and would encourage others to do likewise. We could start an MSE campaign...:money: