Tories seek to abolish tax on savings for basic rate tax payers...............

ed123_2

....article in todays Torygraph & Independent at a cost of £4 billion....however an article in the Sunday Times money section Mev King of the BOE is recommending only partial FSA backing for higher interest accounts......ed:eek::rotfl:

Jonbvn

ed123 wrote: »

....article in todays Torygraph & Independent at a cost of £4 billion....however an article in the Sunday Times money section Mev King of the BOE is recommending only partial FSA backing for higher interest accounts......ed:eek::rotfl:

Cash ISA's rendered useless (for basic rate taxpayers) in one foul swoop:cool:

roddydogs

So what , a lot of people (Including me) have got both, I d rather have to pay no tax on both, than just one!

Jonbvn

roddydogs wrote: »

So what , a lot of people (Including me) have got both, I d rather have to pay no tax on both, than just one!

But why would you bother with a cash ISA, when other accounts are well known to pay more interest, and they would also be tax-free???

koopa_coffee

Yes but there's no guarantee that savings accounts would be tax free for that long. Also if you become or are a higher rate tax payer then the benefits are still there. I'd be in no rush to close any ISA accounts.

roddydogs

Jonbvn wrote: »

But why would you bother with a cash ISA, when other accounts are well known to pay more interest, and they would also be tax-free???

My ISA with Lloyds/TSB is currently paying 3.75%, (Tax Free of course) can you beat that before tax/Instant withdrawal?

theGrinch

collection of tax on interest is very easy. while tax breaks are always good, maybe lowering PAYE instead

Lokolo

roddydogs wrote: »

My ISA with Lloyds/TSB is currently paying 3.75%, (Tax Free of course) can you beat that before tax/Instant withdrawal?

Lloyds vantage current account pays 4% before tax with balances between £5-£7k

Jonbvn

roddydogs wrote: »

My ISA with Lloyds/TSB is currently paying 3.75%, (Tax Free of course) can you beat that before tax/Instant withdrawal?

Yes with the LTSB Vantage account paying 4%, assuming of course it was tax-free, which is the whole point of the discussion.

Of course the important point is that many banks/BS would top offering ISA's to new money, since they would offer so little advantage to normal savings accounts.

StevieJ

Jonbvn wrote: »

But why would you bother with a cash ISA, when other accounts are well known to pay more interest, and they would also be tax-free???

The cash ISA has other advantages e.g. it doesn't count towards restriction of age allowance.

adambro

What a crazy idea. I'm afraid that with the economy being how it is, Cameron should put any plans like this on hold. I completely agree that we should encourage people to save but when the country has so much debt to try to deal with and so cuts to services are inevitable, it seems odd to do something which only benefits people with savings. How about instead of loosing billions of tax income to try to encourage saving, Cameron simply cuts less services! Changes like this will do little to encourage saving in my view, the key to that is education of school kids to instil a saving mentality from an early age.