Budget: £15000 ISA Limit from 01/07 for Cash OR S&S

lisyloo

You should still be able to have a S&S ISA with the likes of H&L and a cash ISA with banks.

Ok - maybe I read too much into the BBC's

Cash and shares Isas to be merged into single New Isa

I was interpreting that as one physical ISA not one allowance.
I guess time will tell but in general I don't want the same provider of both services.

jimbow25

Explanation of transitional rules on the factsheet here: https://www.gov.uk/government/publications/the-new-isa-factsheet

knack92

From the Budget document on gov.uk

New ISAs
1.167 Budget 2014 announces a radical reform of the ISA system. Around half of all UK adults have an ISA, and in order to give these savers greater choice in how they decide to save, the Budget announces that the ISA will be reformed into a New ISA (NISA), which will be a simpler product with equal limits for cash and stocks and shares. This will mean that for the first time ever, savers will be able to transfer previous years’ funds from stocks and shares ISAs into cash ISAs. From now on, savers will have complete flexibility over how they choose to save and invest, within the overall limit.

1.168 The government also wishes to allow people to save more tax-free, so they can see their savings grow year on year. The Budget announces that the annual investment limit for the NISA will be £15,000 a year. This nearly trebles the current limit of £5,760 a year for saving in cash ISAs, and will benefit more than 5 million people who currently reach their cash ISA limit, three-quarters of whom are basic rate taxpayers. It will also increase the stocks and shares limit by nearly a third, from £11,520, and means in total over 6 million people will benefit from the higher overall limit.59 The government will also raise the limits for Junior ISAs and Child Trust Funds from £3,720 to £4,000. These changes will be introduced from 1 July 2014.

1.169 To further increase the choice that ISA savers have about how they invest, ISA eligibility will be extended to peer-to-peer loans, and all restrictions around the maturity dates of securities held within ISAs will be removed. The government will also explore extending the ISA regime to include debt securities offered by crowdfunding platforms.

2.44 Individual Savings Accounts (ISAs) to be reformed into a simpler product: the New ISA – The overall annual subscription limit will be increased to £15,000 from 1 July 2014, and this full amount will be permitted to be held in either cash, stocks and shares, or any combination of the two. Individuals will be permitted to transfer any funds previously invested in stocks and shares into cash outside of annual subscription limits. (8)

2.45 Removing restrictions on securities brought into an ISA – The government will remove all restrictions on the maturity dates of securities permitted to be brought into an ISA from 1 July 2014. (9)

2.46 Increasing the annual subscription limits for a Child Trust Fund and a Junior ISA –
The annual subscription limits for Child Trust Funds and Junior ISAs will be increased to £4,000 from 1 July 2014.

2.47 Extending ISA eligibility to peer-to-peer loans – The list of qualifying investments for ISAs will be extended to include peer-to-peer loans. The government will continue to explore further extending the list to include debt securities offered via crowdfunding platforms. (9)

2.48 Extending ISA eligibility to core capital deferred shares – The list of qualifying investments for ISAs will be extended to include core capital deferred shares from 1 July 2014.

Nednats

Archi_Bald wrote: »

The way I understand it is you do not need any loophole. You can put at total of £15 into cash and/or S&S ISAs. You decide how much to put into which bit.

So there won't be 2 allowances?
There will 1 big allowance that can be use for cash or S&S?

SephirothX

With a £15k limit it makes taking money out your ISA a good option if you aren't earning enough to fill that limit.

Let's say you have a £20k ISA right now. Taking that out would mean 4 years to get it back into ISAs plus whatever you want to put in over those four years. Now it would only take two, with £10k spare which chances are you'd put in over two years anyway.

So you could put that £20k into a regularly savings account for better interest rates then funnel it back into an ISA when the rates improve.

It's obviously no good for the wealthy who can afford to put 5 figure sums in every year, but a lot of people struggle to fill existing limits.

Shark

Why does it increase to 15k in July and not when new ISA allowance opens...

Means going to have to pay extra fees to top up the extra £3k in July for maxing ISA.

Wilma33

Tweet from HM Treasury:


https://twitter.com/hmtreasury/status/446275246685831168/photo/1

boglehead

That is very good news... that means £30k for a family every year (£34k if you include JISA)

DragonQ

SephirothX wrote: »

With a £15k limit it makes taking money out your ISA a good option if you aren't earning enough to fill that limit.

Let's say you have a £20k ISA right now. Taking that out would mean 4 years to get it back into ISAs plus whatever you want to put in over those four years. Now it would only take two, with £10k spare which chances are you'd put in over two years anyway.

So you could put that £20k into a regularly savings account for better interest rates then funnel it back into an ISA when the rates improve.

It's obviously no good for the wealthy who can afford to put 5 figure sums in every year, but a lot of people struggle to fill existing limits.

Yes. This will make me more likely to actually take money out of my ISA to fill up Vantage/Plus accounts in the shorter term. I have ~£10k that isn't in an ISA wrapper so I could take out £5k from my ISA to take advantage of Vantage/Plus and know that I can put it all back in if ISA rates rise.

Nednats

Shark wrote: »

Why does it increase to 15k in July and not when new ISA allowance opens...

Means going to have to pay extra fees to top up the extra £3k in July for maxing ISA.

Although it might be possible you can put the extra £3K in a cash ISA and there will be no fees