ISA limits at risk

cashbackproblems

Just to congratulate everyone who votes for the Tories/Lib Dems who are doing a great job cutting services/benefits for the poor and now ISA limits are at risk.

Seems like they want to encourage people to spend and get into even more trouble by having nothing to fall back on!!


http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=515835&in_page_id=7

Paul_Herring

Isas cost the Treasury £2.2 billion in the 2008-09 financial year in terms of tax that would otherwise have been due on interest and dividends.

I find that number highly suspect, since most (cash) ISAs these days are at similar rates to what a basic rate tax payer gets from a normal savings account after tax.

Frinstance: http://www.halifax.co.uk/savings/savingshome.asp
ISA: 2.8%
Regular savings account: 3.55%, or 2.84% after tax.

http://products.santander.co.uk/savingsandinvestments.html
ISA: 2.75%
Regular: 3.5% -> 2.8%

And as one of the comments point out, the dividends within an equity ISA *are* taxed. It's the capital gains that aren't; and if your gains (were they not held in an ISA) when you liquidate are under the CG allowance, there's no tax to pay on those either.

Masomnia

One Labour MP says it so it must be true...

Kavor

£2.2bn does seem too high to me, although it wouldn't surprise me if they did look to reduce the ISA limit slightly. After all, the 40%+ increase in the limit was just an attempt by the Labour party to buy votes.

triplea35

Paul_Herring wrote: »

I find that number highly suspect, since most (cash) ISAs these days are at similar rates to what a basic rate tax payer gets from a normal savings account after tax.

.

I think your reasoning is a little flawed.

The fact that cash isa rates sre at similar rates to normal savings accounts after tax means that the the loser is HMRC and the Banks are the only winners in this situtaion.

The Banks should be offering ISA rates the same as gross rates for normal savings accounts so that it is the saver that benefits from the ISA allowance.

chedburgh

Masomnia wrote: »

One Labour MP says it so it must be true...

Agreed. Scaremongering by a single Labour MP.

cashbackproblems wrote: »

Seems like they want to encourage people to spend and get into even more trouble by having nothing to fall back on!!

So did the last Labour government, who presided over the trashing of the economy. They are all the same, unless you wear red or blue blinkers that only let you see what you want to see...

Jonbvn

HL are reporting the same thing.
http://www.h-l.co.uk/news/expert-comment/cuts-in-the-isa-allowance2

Call me cynical, but I have doubts regarding this info, given it's source (Labour MP).

Cautious_Investor_3

cashbackproblems wrote: »

Just to congratulate everyone who votes for the Tories/Lib Dems who are doing a great job cutting services/benefits for the poor and now ISA limits are at risk.

Seems like they want to encourage people to spend and get into even more trouble by having nothing to fall back on!!


http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=515835&in_page_id=7

I'd agree with other posts subsequent to the OP that this is just scaremongering.

However your first sentance does raise an interesting point, why is it that those who say don't cut never seem to come up with an alternative for repaying the massive amount of debt that this country as a whole is in.

The Cautious Investor

dunstonh

cashbackproblems wrote: »

Just to congratulate everyone who votes for the Tories/Lib Dems who are doing a great job cutting services/benefits for the poor and now ISA limits are at risk.

Seems like they want to encourage people to spend and get into even more trouble by having nothing to fall back on!!

Thank you for congratulating those with the common sense to vote in the current Govt. Another term of Labour would have destroyed this country (even more than they already did).

As others have said, one insignificant Labour MP reckons ISA limits will drop. It must be a slow news period for the media to even run it as a story. No doubt if the same MP thinks the second coming of Christ is going to happen they would treat that just as seriously as well.

Reaper

cashbackproblems wrote: »

Just to congratulate everyone who votes for the Tories/Lib Dems who are doing a great job cutting services/benefits for the poor

lol. Maybe you should have taken a closer look at their policies. Labour also intended huge cuts, the only difference was timing. Labour wanted to wait a bit longer and rack up even more debt (because they think the recovery is fragile) before they got started. After which presumably they would have had to make the cuts even bigger to make up for it.

Right now the country is not only in debt but still spending more than it is earning. Expect a lot of people moaning about the cuts soon (and they will be bad believe me) but not offering any alternatives.

Paul_Herring

dunstonh wrote: »

No doubt if the same MP thinks the second coming of Christ is going to happen they would treat that just as seriously as well.

Well the original link was the Daily Mail...