MSE News: Isa limit to rise in April

michaels

I think their should be a cap on the maximum funds in both types of ISA - otherwise the richest are receiving the most benefit. Surely the purpose is to encourage some level of saving so that people are not dependent on the state if their income falls temporarily - why subsidise those with most spare money to save with an ever increasing tax allowance?

LongTermLurker

michaels wrote: »

I think their should be a cap on the maximum funds in both types of ISA - otherwise the richest are receiving the most benefit. Surely the purpose is to encourage some level of saving so that people are not dependent on the state if their income falls temporarily - why subsidise those with most spare money to save with an ever increasing tax allowance?

£10200 a year, or whatever it climbs to, can hardly be considered the sole realm of the rich! I accept that many people can't save that per year, but there's a hell of a lot on far-from-high incomes that can.

And the total size of the pot is only based on 3 factors:

1. How much you save/invest per year
2. How many years you're doing it for
3. How much your savings/investment grows

1's been taken care of; 2 is the same for everyone and 3 depends on the same luck and judgement available to everyone as well, regardless of income.

The fact that you can only feed so much in a year is an effective cap on the accumulation.

I'd understand your argument if it had any substance, but it just sounds like jealousy and does a lot of low to middle earners an injustice.

hansi

Jonbvn wrote: »

And it will increase at RPI next year again. There really is no pleasing some people is there?

Anyway, who says you have to put the money in a low rate cash ISA? I have been putting the full £10.2k into a S&S ISA for the last year. So far, I am up far more than any feasible bank loan rate.

It's not a question of not pleasing people. One one hand the Government are saying we don't save enough, and on the other hand they only allow us to save (tax free), a pittance!

LongTermLurker

hansi wrote: »

It's not a question of not pleasing people. One one hand the Government are saying we don't save enough, and on the other hand they only allow us to save (tax free), a pittance!

Isn't the reason self-explanatory?

Be grateful.

MiserlyMartin

Jonbvn wrote: »

And it will increase at RPI next year again. There really is no pleasing some people is there?
.

I would rather my savings interest rate was paying above rpi. At the moment isa's seem a poor investment. Allowance is going up - big deal!

LongTermLurker

MiserlyMartin wrote: »

I would rather my savings interest rate was paying above rpi. At the moment isa's seem a poor investment. Allowance is going up - big deal!

But an ISA investment could return 20, 30, 50% per year if you pick the right stocks??? Excellent investment.

Ah, you're talking CASH? Not so good at the moment, no, but if you're looking to build up a cash holding the long term benefits still hold out. The raw interest rate isn't everything.

Jonbvn

MiserlyMartin wrote: »

I would rather my savings interest rate was paying above rpi. At the moment isa's seem a poor investment. Allowance is going up - big deal!

As I said in my post, cash ISA's are not the only option.

LongTermLurker

Jonbvn wrote: »

As I said in my post, cash ISA's are not the only option.

Of course, you know what's going to happen though. With interest rates low, all those people who would never have previously considered investing will now start to think about it based on press, bank, fund house and Internet forum coverage. I've noticed a significant number of posters on here saying that they're looking to start investing for the first time. I'm sure many are just the natural flow of incomers, having started earning decent money and wondering what to do with it, but others will no doubt just be looking for better rates on their cash nestegg.

Those people will filter into the market over quite a long timeframe, depending on how much personal persuasion they need. As more and more invest, the price of units and shares will increase, leading to increased growth and income for those already invested.

Those who have been investing for a while will benefit; those who invest ahead of the crowd will benefit, but those who hold onto cash the longest will inevitably buy at the top, just when those early investers and institutions decide to take profits. Those last investers will see their pot drop and will say they should never have invested and how much of a mug's game the stock market is.

Call me Mr Cynic, but I'd lay odds on it.