Why can you only have £3k in an ISA ?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
26 replies 2.7K views
Rochdale_GuyRochdale_Guy Forumite
1.7K Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Don't understand at all.

I work full time like most of you, pay tax and NI contributions yet we are taxed on our savings :(

Am new to these ISA thingies, great news that its tax free, but why only £3,000 ?

Baffled. ??? >:(
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Replies

  • Rochdale_GuyRochdale_Guy Forumite
    1.7K Posts
    Sorry, I meant to say we're taxed on our normal savings (like my ING a/c) yet then they give us all £3,000 to save in an ISA tax-free ?!?!

    That means any tax payer is mad to have a normal savings account (yes, it took me long enough to find out about the existance of ISA's !!! :-[ )
    .
  • laminkilaminki Forumite
    140 Posts
    3k is the limit for cash ISA. full stop.

    look elsewhere for rules you can bend or break.
    mess ith this one and the taxman'll getcha! :o
  • isasmurfisasmurf Forumite
    1.8K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    ✭✭✭
    Well, I think you've answered your own question really. The Government wants to limit the amount of tax they lose through ISAs. ISAs cost the Chancellor almost £1bn in lost tax in 2003-04. Ok small in the grand scheme of things but just think how many schools could be refurbished with that or how many doctors and nurses could be recruited.
    That means any tax payer is mad to have a normal savings account (yes, it took me long enough to find out about the existance of ISA's !!!  :-[ )
    Yep, you're right there.
  • DiggingOutDiggingOut Forumite
    770 Posts
    That means any tax payer is mad to have a normal savings account

    Until you've used your ISA allowance. Once you've put £3K in for the year, normal savings accounts are still a good thing.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • david78david78 Forumite
    1.7K Posts
    they give us all £3,000 to save in an ISA tax-free

    If only they did!
    3k is the limit for cash ISA. full stop.

    Its the limit this year and next. Then it will be £1000. Eventually it will be £0.
  • FinishrichFinishrich Forumite
    1K Posts
    Part of the Furniture 500 Posts Combo Breaker PPI Party Pooper
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    You could save £7k in a Maxi Isa - but that would all have to be invested in stocks & shares. The other option is the Mini Isa which is split £3k Cash, £3k stocks & shares and £1k insurance
  • Noxid_2Noxid_2 Forumite
    13 Posts
    Well, I think you've answered your own question really.  The Government wants to limit the amount of tax they lose through ISAs.  ISAs cost the Chancellor almost £1bn in lost tax in 2003-04.  Ok small in the grand scheme of things but just think how many schools could be refurbished with that or how many doctors and nurses could be recruited.
    Yep, you're right there.

    Yeah and think how many buerocrats he could wase 1 billion on ;D
    Charles J
  • DiggingOutDiggingOut Forumite
    770 Posts

    Yeah and think how many buerocrats he could wase 1 billion on ;D

    Or how much he could top up MP pensions.... ;)
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • Noxid_2Noxid_2 Forumite
    13 Posts

    Or how much he could top up MP pensions.... ;)

    More like his pension
    Charles J
  • Yes, it is depressing that ISA allowances are only 1k, 3k or 7k, but going down in April 2006 :'(

    On the bright side though, hopefully there will be a tax-free successor to the ISA when it eventually goes, like the ISA was to the TESSA :)

    Yet, it is ridiculous that the government is allegedly "encouraging us to save" but then restricting the ability to do so tax-free from April 2006 >:(

    Leia
    I want to be a good saver, but I find it difficult to control my temptation to spend :o .

    I owe £1,247 more than I have in savings :( .
    .
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