Could the government raise the limit for tax free savings?

older_and_no_wiser

Tax tax tax.  I pay tax on my earnings and then have to pay more tax on any of that money I choose to save for a rainy day. I know I'm lucky to be able to save and I have an ISA allowance.  But...just saying ;-)

Daliah

older_and_no_wiser said:

Tax tax tax.  I pay tax on my earnings and then have to pay more tax on any of that money I choose to save for a rainy day. I know I'm lucky to be able to save and I have an ISA allowance.  But...just saying ;-)

Do you want a health service? Roads? Forces to defend us from attacks? Intelligence to prevent cyberattacks and spies? Schools? A social security system? Laws? Courts? and so on.

I don't much like paying tax, either but it could be a great deal worse - I could be so poor that I didn't have to pay any tax, definitely a worse position than I am in now, and have been for the last 50 years.

Albermarle

older_and_no_wiser said:

Tax tax tax.  I pay tax on my earnings and then have to pay more tax on any of that money I choose to save for a rainy day. I know I'm lucky to be able to save and I have an ISA allowance.  But...just saying ;-)

Only two things certain in life - Death and Taxes.

UK is not particularly highly taxed overall, hence the underfunding of some public services.

noh

Daliah said:

older_and_no_wiser said:

Tax tax tax.  I pay tax on my earnings and then have to pay more tax on any of that money I choose to save for a rainy day. I know I'm lucky to be able to save and I have an ISA allowance.  But...just saying ;-)

Do you want a health service? Roads? Forces to defend us from attacks? Intelligence to prevent cyberattacks and spies? Schools? A social security system? Laws? Courts? and so on.

I don't much like paying tax, either but it could be a great deal worse - I could be so poor that I didn't have to pay any tax, definitely a worse position than I am in now, and have been for the last 50 years.

If someone pays no income tax it doesn't mean they are poor. They may have structured their saving etc to take maximum advantage of tax allowances.

MK62

Could the government raise the limit for tax free savings?

TBH, the PSA (and dividend allowance) could just as easily be targets for scrapping as increasing......maybe more so in the current environment.

Individuals already get £20000pa ISA allowance, and all interest and dividends from ISAs are already tax free. Other than politics and optics, is there much of a reason for them? A small adjustment to the Personal Allowance could mean the majority wouldn't lose out (although as with any change to the tax system, some might)

Millyonare

UK tax is only trending in one direction, and that's up. It's not coming down.

We've had a decade of red Tories and taxes have soared to a record high (outside war). Recent attempts to cut tax have been howled down by the hysterical media. The UK is the only G7 economy spiking major taxes after the pandemic. We've got a decade of red Labour coming up after the next election and they love to tax and spend other people's money. We are trapped in a Marxist taxation loop.

It is thus more likely the future tax-free savings limit will be reduced or scrapped, not raised.

I also expect future private-pension taxes to be increased, and saving limits decreased.

The days of a low tax burden are all but over.

Dyor, etc.

400ixl

The government is trying to stimulate spending in order to minimise a potential recession. Reducing tax on savings interest is likely to not do that, people with high levels of savings like this will likely just re-invest it back into savings and not spend it.

They need to be using the funding they have to a) support those in need b) support public services c) reduce the debt they already have.

As much as I would like them to reduce tax on savings interest I fully appreciate why it is not the right move to be making.

msallen

older_and_no_wiser said:

Tax tax tax.  I pay tax on my earnings and then have to pay more tax on any of that money I choose to save for a rainy day.

No you don't. Any money that you choose to save is not taxed - only further income in the form of interest is taxed.

masonic

Here's a radical thought: have HMRC scrap the rule around cash ISAs having to be accessible at any time, which would allow the rates on fixed term / notice accounts to be lifted somewhat as they'd no longer be 'easy access with penalty' accounts. This would have an essentially neutral effect on taxation and allow ISA providers to better match their saving and lending activities.

badger09

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 stopped deducting tax at source in 2016 IIRC.

Your relative might have to pay some tax on the £20k in the non ISA account, depending on their overall tax position & whether or not they have other savings.

Details here:
https://www.gov.uk/apply-tax-free-interest-on-savings