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Scrap ISAs as most of the tax benefit goes to the rich?
Comments
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Don't scrap ISA's.
They are a fairly good incentive for people to save, be they "rich" or not so well off. I happen to have a fair old chunk of my savings in ISAs, but I wouldn't class myself as "rich". OK, "rich" compared to someone who hasn't be able to save any money, but certainly not rich compared with many people that I encounter or know.
And I don't see ISA's as a tax "shelter" for what I regard as rich people. Very wealthy people will be able to benefit more from other (probably more dubious) means than putting a few grand in an ISA each year.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
Don't scrap ISA's.
...
I propose an amendment.
Scrap all ISA's which pay a derisory interest rate, say 1% or less.
They are an insult to the intentions behind the product.
Yes, I accept people should 'shop around', but the reality is not everyone is money savvy, and the ISA providers know this and can milk it to the max.0 -
I propose an amendment.
Scrap all ISA's which pay a derisory interest rate, say 1% or less.
They are an insult to the intentions behind the product.
Yes, I accept people should 'shop around', but the reality is not everyone is money savvy, and the ISA providers know this and can milk it to the max.
No different to any other product these days, always have introductory offers then milk us thereafter.
If people CBA to shop around, don't think you legislate, for it.
Don't forget if they all shoped around there would be less for us;)"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »No different to any other product these days, always have introductory offers then milk us thereafter.
If people CBA to shop around, don't think you legislate, for it.
Don't forget if they all shoped around there would be less for us;)
It is very different to how most businesses operate... most businesses try to offer *some* kind of value to the customers in order to keep them. The banks business model is one of deceit, a numbers game where they explicity and deliberatly try to rob as many as possible by moving them onto crap rates, expecting to lose the percentage that notice/can be arsed. We've got to the point where we almost think of it as acceptable and expected for banks for take our money and then try and f\/ck us. It's no wonder everyone hates them - they treat the customer as a sheep to be shorn - and very stupid sheep at that.
Isa's are a prime example of this - the benefit of the tax free interest tends to accrue to the bank rather than the end user, so long as the end user doesnt check the rates and switch accounts each and every 6 months."There's two bulls standing on top of a mountain. The younger one says to the older one: "Hey pop, let's say we run down there and f\/ck one of them cows". The older one says: "No son. Lets walk down and f\/ck 'em all".
^ That's a bank board meeting. There is no nice chap in glasses singing stuff & trying to give us a good deal.0 -
Don't scrap ISA's.
They are a fairly good incentive for people to save, be they "rich" or not so well off. I happen to have a fair old chunk of my savings in ISAs, but I wouldn't class myself as "rich". OK, "rich" compared to someone who hasn't be able to save any money, but certainly not rich compared with many people that I encounter or know.
And I don't see ISA's as a tax "shelter" for what I regard as rich people. Very wealthy people will be able to benefit more from other (probably more dubious) means than putting a few grand in an ISA each year.
I would argue that ISAs should be scrapped.
They provide no incentive to me to save. Like DervProf I have a fair chunk of my assets in ISAs now, having felt it was sensible to accumulate them each year. But the existence of ISAs hasn't made me save any more, or any less for that matter.
Whilst the tax relief has been nice of course, the 'use it or lose it' opportunity to put a limited amount into a tax shelter each year simply distorts my choice of savings products, and makes managing them slightly more complicated.
Thinking back, I also seem to recall the 'use it or lose it' issue meant saving more than needed for emergency funds into cash ISAs (or the earlier incarnation, the TESSA) at the same time as paying higher rates of interest on a mortgage or other loan. I don't really think of borowing to put money into an ISA as proper 'saving'. Possibly a sensible personal choice for the long term, but a perverse incentive from the government which mostly benefits the banks.0 -
I would argue that ISAs should be scrapped.
Looking at it simply, cash ISAs return about 20% more than non-ISA savings accounts. If they were scrapped, many savers would be worse off. As a tax payer who has never claimed any benefits in my life, ISAs are a small token of "reward" for bothering to work for a living and not blowing all my cash, therefore not being eligible for certain benefits if I were unemployed or ill.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
I think oldvicar should renounce cash ISAs if they genuinely believe that they are distorting the personal savings market for themselves.
J_B.0 -
grizzly1911 wrote: »Get out of the sun.
No I haven't. The ISA is just another form of saving that is made over and above an adequate pension provision. It is only one part. You asked me what I did outside of pensions.
The only decision I have turned off was the AVCs.
People do save for other things than just retirement.
Nothing wrong with pensions but they aren't as good a deal as they once were (IMO) and for people lower down the pay scale the eventual return may make very little difference to their position despite sacrifices made in life to get there. Not everyone can afford those sacrifices.
As I have said I know people who are now coming to the end of the pension cycle, who looking back are questioning why their expectations weren't achieved. These have been a mix of private pension and employer schemes.
You are a capable person with knowledge and the ability to follow/understand the market and manage your own SIPP. This model isn't necessarily achievable by many who will be reliant on mainstream products.
You seem to have changed your argument completely from warning me against having a traditional pension product because of all the fees, ripoffs and the costs of an annuity to stating that there is nothing wrong with a pension.
I can only assume that you've taken on board what I have been posting and you've modified your viewpoint. If that's the case then kudo's to you, I thought I was the only person on this particular board who has ever done that. :cool:
From:grizzly1911 wrote: »Pensions are one of the great lies or many.
To:grizzly1911 wrote: »Nothing wrong with pensions0 -
heathcote123 wrote: »It is very different to how most businesses operate... most businesses try to offer *some* kind of value to the customers in order to keep them. The banks business model is one of deceit, a numbers game where they explicity and deliberatly try to rob as many as possible by moving them onto crap rates, expecting to lose the percentage that notice/can be arsed. We've got to the point where we almost think of it as acceptable and expected for banks for take our money and then try and f\/ck us. It's no wonder everyone hates them - they treat the customer as a sheep to be shorn - and very stupid sheep at that.
Isa's are a prime example of this - the benefit of the tax free interest tends to accrue to the bank rather than the end user, so long as the end user doesnt check the rates and switch accounts each and every 6 months.
^ That's a bank board meeting. There is no nice chap in glasses singing stuff & trying to give us a good deal.
No different to:-- Mutual building societies do it
- Insurance companies(house and car),
- telephone companies (fixed and mobile),
- energy companies,
- petrol stations offering "super" price fuel but poorly labeling pumps
- supermarkets offering loss leaders in the hope you buy the overpriced stuff too or multibuys that are more expensive than individual items,
- Shoe shops offering you expensive polish,
- Double glazing 55% off sales when you don't have an established base price,
- Outsourcing in business where anything outside contract costs an arm and a leg
- upgrade models of products where the cost is no different but people are driven to upgrade,
- branded products versus OEM products
Basically business, they are all in it to make a profit.
The thing that gets me with banking, phone, insurance and energy etc is that they must waste so much money in chasing new sales and maintaining retention teams that they may as well all just pay a fair rate and be done with it.
I have one "rainy day" ISA and I have to keep renewing it to maintain a rate, but my provider leaves the old account open, so they are maintaining probably 4 "dormant" accounts into the bargain.:wall:"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
In straightened economic times surely such a subsidy from the poor to the rich should be removed.
It's not a subsidy from poor to rich, it is less of a subsidy from rich to poor. Interesting point though- but why limit this to ISAs, what about Private Residence Relief sheltering rich homeowners from capital gains tax at the expense of those with no assets - do you think that should also be removed and if not why not?0
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