Budget 2009: Cash Isa Limit Increased

[Deleted User]

Saw some paperwork at work (Abbey )today regarding the new ISA limit,
It stated that the ISA change will work by birth date. As in anyone born after 6th April 1960 will be entitled to new ISA allowance. (Might be 1959, the reason why I'm hesitating is that a colleague brought up the fact that some people that are 49 will be entitled to it - they wont have to wait til 50th birthday as long as they are born before a certain date) - will need to check.

Milarky

adambro wrote: »

The reality is that over 50s are getting something that everyone else won't get, the opportunity to subscribe an extra £3,000 this year. When April 6th 2010 comes round and everyone is getting the same ISA allowance, those under 50s will still be behind.

Good point. But in the scheme of things the additional benefit is not that great - it is only worth £5 or so this year - perhaps £8 per year on average with improved rates. In other words it would amount to about £200 additional benefit over 25 years, say.

david78

chr_is wrote: »

Saw some paperwork at work (Abbey )today regarding the new ISA limit,
It stated that the ISA change will work by birth date. As in anyone born after 6th April 1960 will be entitled to new ISA allowance. (Might be 1959, the reason why I'm hesitating is that a colleague brought up the fact that some people that are 49 will be entitled to it - they wont have to wait til 50th birthday as long as they are born before a certain date) - will need to check.

On the HMRC web site there is a PDF document with some information about the changes. Its document BN51. (click on the Budget briefcase on the home page, then on Personal taxes ...). This gives you the telephone number and email of someone you can contact to ask questions about the increased ISA allowance.

Yesterday I asked if the extra allowance was available this tax year for people who are currently 49 but will be 50 before the tax year end. I got the following email back today, which seems promising, though it is not as clear as I would have liked.

"A 50th birthday on or after 6 October 2009. The existing limits apply until a person becomes 50."

My reading of this is that, you have will be able to use the extra allowance on your 50th Birthday if this occurs in the current tax year. So the extra allowance this tax year should be payable for anyone who was born on or before 5th April 1960 (not after 6th April 1960 as in quote above, or a 20 year old would get it!), including some people who are currently 49 years old.

People younger than this will get the allowance from next tax year.

I haven't seen any other commentary on this anywhere else. Note that the response also implies that someone who is currently 50 or older will not get the allowance! But I don't think this is what is intended.

adambro

Milarky wrote: »

Good point. But in the scheme of things the additional benefit is not that great - it is only worth £5 or so this year - perhaps £8 per year on average with improved rates. In other words it would amount to about £200 additional benefit over 25 years, say.

Only if you consider cash ISAs. The potential returns from investing in a stocks and share ISA could be enormous so it is impossible to really quantify what the benefit of being able to subscribe an additional £3000 this year is. The benefit could be as large as the investor is able to acheive.

Wild_Billy

adambro wrote: »

Only if you consider cash ISAs. The potential returns from investing in a stocks and share ISA could be enormous so it is impossible to really quantify what the benefit of being able to subscribe an additional £3000 this year is. The benefit could be as large as the investor is able to acheive.

Or the loss could be as large as the investor is able to achieve.

Pitiful.

adambro

Wild_Billy wrote: »

Or the loss could be as large as the investor is able to achieve.

Pitiful.

How does the fact that investments can go down, as well as up, change the fact that an additional £3000 allowance is an opportunity to generate a reasonably significant tax free return. I've never suggested that all these lucky over 50s getting access to a magic money tree.

Wild_Billy

I REALLY do not see this is a big deal or a great injustice- there are plenty of things that are age-dependent. What about the National Minimum Wage? The younger you are the less you get paid. What about the support for 18-24 year olds who are unemployed for over 12 months?

And I've looked in the Budget and this is the explanation of the difference. It says "this will enable people who have retired or are beginning to prepare forretirement to move taxed savings into a tax-advantaged ISA, rewarding those who have saved by improving their returns." It seems reasonable to say we need to give over 50s a little more support because they have less time to rebuild their pension pots following the recent destruction of pension funds and low interest rates on savings. As a 29 year old I have no problem with that.

So let's agree to disagree. I just find it ridiculous and indicative of the attitudes of too many people in this country. How about just being happy for what we've got and not what we haven't? It's the pursuit of greed that got us into this mess in the first place.

RayWolfe

Wild_Billy wrote: »

I just find it ridiculous and indicative of the attitudes of too many people in this country. How about just being happy for what we've got and not what we haven't? It's the pursuit of greed that got us into this mess in the first place.

Well said Billy (or may I call you Wild?). You are new here but you will, unfortunately see a lot of the "me first" attitude hereabouts.

TREVORCOLMAN

BruceyBonus wrote: »

I'm currently drafting a letter to send to my local MP and Alistair Darling. I would also like to arrange a petition, if anyone is interested.

I believe this policy is complete and utter discrimination against under 50s who have been saving for their entire lives.

And decreases in interest rates is also discrimination against those without mortgages - lets start a petition for that too.

TREVORCOLMAN

amcluesent wrote: »

>All the serious pain is being reserved for the next government so that electors blame it<

Yep. Clown's been running a 'scorched earth' policy for a year now. Printing money will ensure he leaves the Tory's with a battle over inflation too.

In 1997 Clown inherited the best economy for generations. In 2009, he'll leave office with England's economy in ruins, the £ worthless, 10 million idle, tax sky-high and inflation on the rise, but the chav underclass wanting for nothing. How very socalist.

Ah - Culpability Brown! Now we are all in the Brown stuff!