Could the government raise the limit for tax free savings?

[Deleted User]

Beddie said:

What_time_is_it said:

Beddie said:

There is zero chance of that happening in the near future, as tax rises will be the order of the day, not cuts. It would also be seen as helping "the rich" in this stupid 'politics of envy' country we live in.

Well, it totally would be helping the rich wouldn't it? The idea of the government choosing to reduce a tax for people with over £50k of savings right now is totally laughable.

I get your point, but when people talk about "the rich" that should not mean "the not poor." Anyone in their 50s or 60s who's had an ordinary job can still easily have quite a large amount of savings, if they have been sensible and saved. I consider the rich as people earning over £100k, or have million pound houses etc. Not people who have saved for their future instead of spending it all.

I guess we all have a line we draw between rich/average/poor. Growing up in the 70s, we regarded anyone who had a colour telly as rich!

I would consider someone rich/well off who is making circa 60k or house price circa 400k. I'm not sure where you're staying but average salaries in the UK are circa £39k and house price circa 292k.

I personally think people using foodbanks or can't heat their home is horrifying but those who have a fair amount in bank (70k +) think they shouldn't pay tax on their interest income.  

jimjames

older_and_no_wiser said:

refluxer said:

Come on - it might not have been precisely worded, but I'm pretty sure from the context that the OP was referring to the PSA

The point I was trying to make is that it would encourage more people to save more if there was less threat of taxation on savings. 

When a majority of people have under £2000 and the average savings are £6700 vs ISA limit of £20k I can't see any mileage in the government increasing the PSA. If anything it would go the other way and reduce to encourage ISAs to be used. The vast majority of people will never reach the point of paying tax on their savings so it's only a very niche number who will be affected.

https://www.finder.com/uk/saving-statistics

Albermarle

I would consider someone rich/well off who is making circa 60k or house price circa 400k. I'm not sure where you're staying but average salaries in the UK are circa £39k and house price circa 292k.

The trouble with defining someone earning £60K as rich, is how do you define someone earning £100 K ( very rich?) or £200K ( very very rich) or a Premier League footballer on £200K a week ( very,very,very,very,very, very rich?)

Clearly at £60K they are earning more than the average, but I do not think you can define anyone as rich, on just that basis. To some people they would be seen as virtually paupers.

Daliah

older_and_no_wiser said:

The point I was trying to make is that it would encourage more people to save more if there was less threat of taxation on savings.

Hmh. What would you rather have - 100% of nothing, or 80% (or 60%) of something? 

Beddie

Deleted_User said:

Beddie said:

What_time_is_it said:

Beddie said:

There is zero chance of that happening in the near future, as tax rises will be the order of the day, not cuts. It would also be seen as helping "the rich" in this stupid 'politics of envy' country we live in.

Well, it totally would be helping the rich wouldn't it? The idea of the government choosing to reduce a tax for people with over £50k of savings right now is totally laughable.

I get your point, but when people talk about "the rich" that should not mean "the not poor." Anyone in their 50s or 60s who's had an ordinary job can still easily have quite a large amount of savings, if they have been sensible and saved. I consider the rich as people earning over £100k, or have million pound houses etc. Not people who have saved for their future instead of spending it all.

I guess we all have a line we draw between rich/average/poor. Growing up in the 70s, we regarded anyone who had a colour telly as rich!

I would consider someone rich/well off who is making circa 60k or house price circa 400k. I'm not sure where you're staying but average salaries in the UK are circa £39k and house price circa 292k.

I personally think people using foodbanks or can't heat their home is horrifying but those who have a fair amount in bank (70k +) think they shouldn't pay tax on their interest income.  

Hi Stacey, I'm in agreement with you - there should not be an increase in the tax-free limits. I certainly don't fall into that bracket anyway. I'm way below the average on all the indicators mentioned. But as I said, we all have our own ideas about who we think is rich.

Anyway, have a pleasant evening 

Daliah

Albermarle said:

I would consider someone rich/well off who is making circa 60k or house price circa 400k. I'm not sure where you're staying but average salaries in the UK are circa £39k and house price circa 292k.

The trouble with defining someone earning £60K as rich, is how do you define someone earning £100 K ( very rich?) or £200K ( very very rich) or a Premier League footballer on £200K a week ( very,very,very,very,very, very rich?)

Clearly at £60K they are earning more than the average, but I do not think you can define anyone as rich, on just that basis. To some people they would be seen as virtually paupers.

Someone on £60k might be the sole breadwinner in a young family with 2 kids, or a disabled family member, or with a partner at uni, and a whacking big mortgage, or a huge student loan or other loans to pay back etc etc. They are unlikely to call themselves rich, and I would set the bar for "rich" much, much higher.

Conversely, an economically inactive person earning £0 might well be very rich.......

Daliah

In answer to the OP: they could but they won't.

sevenhills

Albermarle said:

AIUI, the UK Has some of the better tax breaks in the world for savings already. Being able to shelter £20K a year in an ISA would be a dream for most Europeans at least.

A relative of mine has just put £20k into an Halifax ISA and £20k into a similar one year fix.
Will the non tax free £20k just be taxed by the Halifax at 20%?

Daliah

sevenhills said:

Albermarle said:

AIUI, the UK Has some of the better tax breaks in the world for savings already. Being able to shelter £20K a year in an ISA would be a dream for most Europeans at least.

A relative of mine has just put £20k into an Halifax ISA and £20k into a similar one year fix.
Will the non tax free £20k just be taxed by the Halifax at 20%?

Banks are not deducting any tax from any interest. They do report interest to the HMRC, who will adjust your tax code if required, or ask you to submit a self assessment.

EssexHebridean

sevenhills said:

Albermarle said:

AIUI, the UK Has some of the better tax breaks in the world for savings already. Being able to shelter £20K a year in an ISA would be a dream for most Europeans at least.

A relative of mine has just put £20k into an Halifax ISA and £20k into a similar one year fix.
Will the non tax free £20k just be taxed by the Halifax at 20%?

Gets reported to HMRC who will then deal with it via changes to the tax code I believe.