ISA's under threat

N1AK

rpc wrote: »

So don't punish middle-class savers, but put something extra in to give an incentive to those on lower incomes. Exclusion of ISAs (or a certain value of ISAs) from means testing perhaps?

With respect that's a rather naive perspective. If all the government did was add more benefits to those with low incomes then it would either increase government spending or decrease government funding. Who will end up paying more tax to make up for that?

You might as well say leave ISAs as they are and give poor people £10,000 each rather than punishing savers if you ignore having to fund it.

talexuser

I think anything to encourage the less well off to save is a benefit to society as a whole. Many people who are totally unsavvy about investments or money know about cash ISAs and use them for small savings, so I think they are a good thing as long as the industry does not abuse the interest rates.

Those with larger savings in the middle don't have the advantage of affording expensive accountants or the amounts necessary to use the tax havens so prevalent for those at the top of the pile. But the middle are the ones traditionally hit for government income.

At the end of the day with the demise of final salary schemes, we are on a pensions nightmare journey in years to come, so anything to get working people saving for retirement has got to be a top priority?

N1AK

talexuser wrote: »

At the end of the day with the demise of final salary schemes, we are on a pensions nightmare journey in years to come, so anything to get working people saving for retirement has got to be a top priority?

If they chose £100k as the cash ISA tax relief limit then I really don't think that would do anything to stop working people saving. That's still £200k for a couple and a huge amount for most people who are considering saving.

Most people in a position to save more than £200k (as a couple) would likely be better off putting some of that money into investments so the group affected by the cap really aren't the group needing a government subsidy.

All that said I'm dubious that enough people are affected to justify the change; the complexity of tracking total ISA balances (when people can have dozens) etc that adding a limit would save much.

Minrich

Weren't ISA/Tessa's or whatever invented to get us saving for our futures ? This was in order to get us to pay our own way into retirment and beyond . The rates offered initially were the same if not better than non isa savings , this has changed and is purely down to the Companies offering you the rates being greedy and keeping some of the interest for themeselves . At the moment it also fails to encourage anyone to save and is infact encouraging people to invest elsewhere at more risk to their capital and therefore at more risk to their future and the countries . Saving in safe tax free accounts should be encourage by the government as pensions will be worse and wosre in year to come causing more long term problems for the country too .
I like many others want a safeplace to put my savings not a risk at all , why can't this happen and also give a reasonable return simiklar to CPI or RPI ? Thats all i want

rpc

Minrich wrote: »

I like many others want a safeplace to put my savings not a risk at all

Nowhere is risk free, they just have different types and levels of risk.

why can't this happen and also give a reasonable return simiklar to CPI or RPI ? Thats all i want

Historically, that's about what you get with cash over the long term. I forget the exact figure, but it is very close to inflation. Of course, there will be short periods where cash outstrips inflation and others where it lags behind.

grey_gym_sock

when there's enough money in ISAs that the government could abolish them altogether, and use the extra tax raised to cut income tax by 1p (from both basic and higher rate), why not do it?

AFAICR, we haven't reached that point yet.