ISA allowances Budget 2021

Daliah

I had expected to see the ISA allowances for 2022-23 announced in today's Budget, but all it "announced" was what we already know

2.79 Individual Savings Account (ISA) annual subscription limit – The adult ISA annual subscription limit for 2021-22 will remain unchanged at £20,000.
2.80 Junior ISA and Child Trust Fund annual subscription limit – The annual subscription limit for Junior ISAs and Child Trust Funds for 2021-22 will remain unchanged at £9,000

May be it's typos and they meant 2022-23?

MX5huggy

Your link is the March 2021 Budget not today’s. 

eskbanker

Today's is https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028814/Budget_AB2021_Web_Accessible.pdf

5.35 Starting rate for savings tax band – The band of savings income that is subject to the 0% starting tax rate will remain at its current level of £5,000 for 2022-23. 

5.36 Individual Savings Account (ISA) annual subscription limit – The adult ISA annual subscription limit for 2022-23 will be maintained at £20,000. 

5.37 Junior ISA and Child Trust Fund annual subscription limit – The annual subscription limit for Junior ISAs and Child Trust Funds for 2022-23 will be maintained at £9,000.  

jimjames

I do wonder how long the ISA limit will be maintained at the current level. It's not exactly something the average person can use every year and means those who can are able to build up very substantial portfolios that are completely tax free.

Thrugelmir

By not increasing the annual allowance. Inflation progressively erodes the benefit.

Alexland

The adult ISA allowance is almost 3x the £7,200 in tax year 2009/10 so I don't expect it to increase even with inflation anytime soon. I do wonder if having such a high ISA allowance distracts people from making more use of their potentially more tax efficient pension options. We are both making heavy pension contributions at the moment so other than £4k into LISAs don't expect to make much use of our remaining £16k ISA allowance for the next few tax years.

jimjames said:

those who can are able to build up very substantial portfolios that are completely tax free.

Given our family home uses a healthy proportion of our inheritance tax threshold and we already have various ISA investments it's not that attractive for us to keep adding into ISAs. Maybe AIM portfolio ISAs using business property relief are the answer but given the higher charges I want to delay that for as long as possible and see how they perform during a prolonged recession.

I wasn't impressed with this budget it just seems to be adding to the rate of inflation and creating bigger challenges for average earning working parents employed in the private sector who should have been given some support. Parents don't tend to be in the same position to get inflation linked pay rises or move jobs because they need stability and flexibility. We are lucky that although our pay has not gone up with inflation in recent years we were earning plenty before we had kids. For those on average wages it's going to be hard for them to meet all of life's financial challenges. If the Labour party can find a path to be credible again then maybe this will damage the Conservatives at the next election.

Thrugelmir

Alexland said:

 If the Labour party can find a path to be credible again then maybe this will damage the Conservatives at the next election.

Nothing in the response yesterday to suggest that they are any closer to a coherent economic plan. As Sunak said yesterday. The Government cannot provide all the solutions. 

Albermarle

I wasn't impressed with this budget it just seems to be adding to the rate of inflation and creating bigger challenges for average earning working parents employed in the private sector who should have been given some support.

It is clear that family budgets will be under pressure next year from inflation and the tax increases in the pipeline, and you are right the budget did little to assist the situation.

However away from personal/family finances, it has put more money into various areas that should improve some public services where they are now struggling . So you might have a few less quid in your pocket, but you might not have to as long to get hospital appointments or court hearings,  etc . Or your kids can maybe get on a less crowded train in the morning to go to a better funded school. 

Hopefully.

Alexland

Thrugelmir said:

The Government cannot provide all the solutions. 

Without going too off topic this one seems to create as many new problems as it solves and has hardly been a net contributor of solutions. It's just a shame there is no effective opposition. It's not a political point I would say the same if the parties were switched the other way around.

Albermarle said:

Hopefully.

Exactly and that's the problem with public sector spending there's a huge amount of imbalance with lots of money getting spent in the wrong places. Sometimes I wonder if they keep the nurses underpaid and schools underfunded in order to justify all the money going into the system to be used for other purposes that people are much less likely to agree with.

jimjames

Albermarle said:

I wasn't impressed with this budget it just seems to be adding to the rate of inflation and creating bigger challenges for average earning working parents employed in the private sector who should have been given some support.

 Or your kids can maybe get on a less crowded train in the morning to go to a better funded school. 

It's interesting that although the school might be "better" funded, it's still less than they were funded in 2009.
https://www.bbc.co.uk/news/education-58993708