MSE News: Cash Isa limit should be raised, says Nationwide

gadgetmind

stinktankcynic wrote: »

If the government decided to reduce isa allowances and the banks lowered interest rates, they would have all the cheap cash they need to lend to businesses.

They already have copious amounts of cheap cash. Thanks to a wonderful device called the "printing press" the world is awash with cheap cash.

People would spend cash that was not earning them anything or invest in pensions.

Given the attacks that HMG make on private pensions in pretty much every budget, I think people would need more than low interest rates before they overcame the deep distrust that this creates.

bangon

Forget doubling the cash ISA limit, Government has already taxed income that people save - what right do they have to tax the interest on savings at all.

George Osborne should start the long 'cold turkey' journey to getting 'debt junkie' Britain back on it's feet by completely scrapping all tax on cash savings now! The derisory interest rates paid currently make this an ideal opportunity to strike now when actual tax revenue from savings is at it's lowest. It would at a stroke - incentivise more saving whilst also leaving people with a bit more of THEIR own cash in their poclet to spend as they see fit, which in turn boosts economic activity / growth and increases tax revenue. A virtuous circle :O))

innovate

bangon wrote: »

Forget doubling the cash ISA limit, Government has already taxed income that people save - what right do they have to tax the interest on savings at all.

You (we) are paying tax on your taxed money in all walks of life (VAT, road tax, etc). If you are trying to make a case for 'not taxing taxed money again', you need to provide a credible plan for how
the country will raise the money for

1. its ongoing needs (Social Security, NHS, Defence, peace keeping etc etc)
2. paying back its enormous debts

You will find that one of the only ways to implement your plan would be to raise taxes for everybody. Which would be highly unfair - - why should everyone pay more tax so that a few can save more?

The other way would be to cut the budgets for the needs of the country. That would be equally unfair.

gadgetmind

innovate wrote: »

You (we) are paying tax on your taxed money in all walks of life (VAT, road tax, etc)

Road Tax was abolished in the 30s.

you need to provide a credible plan for how
the country will raise the money

1) Educate young people in the skills that the private sector needs and to the standard that the private sector demands. It breaks my heart to be flying graduates in from far-flung countries for interviews because I can't get enough applications from the UK.
2) Have a far-reaching benefits reform that greatly simplifies the system and lops a huge amount off the bill.
3) HMG really do not understand efficiency. They waste money left right and centre so perhaps we need to say that no-one can work in public sector management until they have been in the private sector for a few years so they understand how to keep things lean and mean.
4) Reward success rather than treating it as something evil that must be taxed out of existence and/or forced overseas.
5) Realise that The City are not your friends and finance is not an industry that will get the country working.

I could easily go on and hit triple digits, but you get the idea.

The other way would be to cut the budgets for the needs of the country. That would be equally unfair.

Our taxation is too large a percentage of our GDP and our spending an even larger percentage. The former needs reducing slightly and the latter needs reducing massively.

Regards debts, the time to reduce these is during the good times. Our current problem is that Labour kept over-spending even during these times to try and buy votes. Some people will vote for whatever party promises to over-spend the most. I have an opinion regards such people that I won't voice here.

evenasus

aleph_0 wrote: »

At the moment, one person can get tax relief on £60,000 in an ISA built up over many year

I think you'll find it's nearer £90,000 than £60,000

If they've used the full ISA allowance every year since they started in 1999 and the ISA predecessor TESSA started in 1991.

Martinslovechild

marathonic wrote: »

Those saving money for an event where they anticipate requiring access with a couple of years.

For example, if saving for a house deposit and you hope to purchase in 2014/5, you shouldn't really invest in the stock market where a sudden drop could delay your plans for 5+ years.

On the flipside, it could also suddenly increase in value, speeding up your plans and allowing you to purchase the property earlier.

Martinslovechild

aleph_0 wrote: »

Why isn't their just a fixed per-person lifetime allowance? At the moment, one person can get tax relief on £60,000 in an ISA built up over many years, whereas a first-time-buyer, able to save >£6k cash per year, does pay tax on some interest.

A fixed allowance of, say, £30k per person, would be much fairer.

Fairer for whom?

Imposing a lifetime limit is like imposing a limit on ambition. Your point smacks of jealousy.

Martinslovechild

Pincher wrote: »

When you invest, you need the safety of getting out of stocks and shares and take shelter in cash sometimes. They put a time limit on how long you can hold cash in a stocks and shares ISA, which is just mad. Obviously, you want to have an ISA, in which you can hold cash or stock in any proportion you want.

There are several cash funds which you could invest in. Alternatively many 'Inverse ETFs' are available which effectively 'short' the commodity or market (i.e. as the market/commodity goes down in price, you make money as any losses in the 'real' market are multiplied by a factor of minus 1).

Pincher wrote: »

Ideally, I want to be able to hold commodities. This would allow me to hedge against rising energy costs and food prices. If I was allowed to hold gold in the ISA from 2007, I would be laughing at the sterling devaluation.

Commodity prices don't exactly go hand-in-hand with domestic energy prices as companies such as Centrica (which owns British Gas) usually 'hedge' their prices by purchasing gas well in advance of delivery. If wholesale prices fall in the meantime, they have to pay the price they negotiated many months earlier, thus domestic prices can increase while wholesale prices are falling.

Martinslovechild

MSE_Helen wrote: »

Nationwide is urging the Government to use next month's Budget to double the amount savers can place into cash Isas...

I urge them to double the Stocks and Shares ISA limit too, but I can guarantee that they won't do that either!

gadgetmind

evenasus wrote: »

If they've used the full ISA allowance every year since they started in 1999 and the ISA predecessor TESSA started in 1991.

And PEPs started even earlier for those prepared to accept some volatility as a price for getting much higher returns.

Many people who did this have significant six figure (even seven figure) sums in ISAs.