Proposed £100k ISA lifetime limit

Albermarle

We should not forget that the Treasury has not actually said anything about ISA allowances/limits. 
It was just an idea from a think tank AFAIK

masonic

MDMD said:

kuratowski said:

Even better, from the Treasury's perspective, would be a tax-free savings account that allows you to invest only in UK gilts

NS&I used to offer tax free fixed interest and index linked certificates. They have not been offered for over a decade so the chance of this is minimal.

The likelihood seems much greater now than in previous years because they've already broken the link with RPI, unlike I/L Gilts, and Gilt yields are now on a higher risk premium than they were in prior years.

Altior

eskbanker said:

Altior said:

Just because people can pay more tax, doesn't mean they should. Taxation isn't a punishment. Wealthier people pay far more tax, as the system should encourage success and not penalise it. The Coates family paid an estimated £481.7m in tax for a single year, announced in 2022. Of course, Denise Coates is a very wealthy and successful woman, predominately self made. So she should pay a lot of tax, and does. 

I'm not sure I would want to give the government half a billion in just a year, though the opportunity would be quite nice!

I'm not convinced that Denise Coates is a particularly representative example, in that she pays herself a vast salary, in the knowledge that this will attract a correspondingly massive tax bill, whereas most in her shoes would employ accountants and advisers to use more tax-efficient remuneration methods - it's noble of her to willingly pay her full whack but for every one Denise Coates there'll be hundreds or thousands of Jimmy Carrs!

I'm not disagreeing with that. I used Denise Coates deliberately as she doesn't avoid tax (to my knowledge). If some of the posters here had their way, she would have to, and that could be nearly half a billion a year gone from the treasury revenue. Along with plenty of others I should imagine.

If there are hundreds of Jimmy Carrs, putting up taxes even more for the wealthiest isn't going to suddenly get them paying extra tax, is it. But it could well cost revenue. 

kaMelo

Altior said:

eskbanker said:

Altior said:

Just because people can pay more tax, doesn't mean they should. Taxation isn't a punishment. Wealthier people pay far more tax, as the system should encourage success and not penalise it. The Coates family paid an estimated £481.7m in tax for a single year, announced in 2022. Of course, Denise Coates is a very wealthy and successful woman, predominately self made. So she should pay a lot of tax, and does. 

I'm not sure I would want to give the government half a billion in just a year, though the opportunity would be quite nice!

I'm not convinced that Denise Coates is a particularly representative example, in that she pays herself a vast salary, in the knowledge that this will attract a correspondingly massive tax bill, whereas most in her shoes would employ accountants and advisers to use more tax-efficient remuneration methods - it's noble of her to willingly pay her full whack but for every one Denise Coates there'll be hundreds or thousands of Jimmy Carrs!

I'm not disagreeing with that. I used Denise Coates deliberately as she doesn't avoid tax (to my knowledge). If some of the posters here had their way, she would have to, and that could be nearly half a billion a year gone from the treasury revenue. Along with plenty of others I should imagine.

If there are hundreds of Jimmy Carrs, putting up taxes even more for the wealthiest isn't going to suddenly get them paying extra tax, is it. But it could well cost revenue. 

It's called the Laffer curve.
https://en.wikipedia.org/wiki/Laffer_curve
There will always be "Jimmy Carrs" but research suggests most people have a greater tolerance to higher taxes than what politicians think they have.

Altior

Yes but the context was me saying that wealthier people pay much more tax. They do. The ones who use all of the possible schemes to avoid it will carry on doing so, so it won't hit them. The only people hit by raising tax on people who already choose to pay a very high amount of tax instead of avoiding it, will mean they will feel pushed into avoiding it too.

The posters who want to tax people at the top already paying millions in tax even more, at what point would they be satisfied that people at the top are paying enough?

It's related to the Laffer curve in a sense, but in my view what those types of views are about is punishing those at the top, not maximising tax revenue.

Albermarle

t's people with all levels of income who save and saving pulls people away from being poor.

I think 25% have no savings and another 15% have only minimal savings. 
The large majority can not save £20K pa, or build up savings of > £100K cash.
Whether you agree with the proposals or not, ISA's are clearly a tax break for the relatively well off.

Altior

Surely the £20K cap is in place to prevent the super wealthy from having an unlimited benefit from the option. It's not a target. I was using ISAs many years ago when I was in part time work, and only on reasonably low income. People who have very little income would be far better off using a pension wrapper, which is essentially a 25% taxpayer footed bonus, if they have scope to put money away outside of an emergency cash fund. 

There's a section of society that feels entitled without putting in the work. They aren't really the types who would be keen on opening a stocks & shares ISA. 

If you're born a female in this country, and happy to have a number of children, it's entirely possibly to go from cradle to grave, without doing a minute's work, and live a pretty comfortable life. ISA or no ISA. 

Altior

Anecdotal, but most of the people I work with are younger than me. It's a fintech firm, and a certain level of intelligence is needed to get in the door. Not mentioning that to big myself up, just to observe that they aren't of low intelligence. 

Most of the young people are absolutely clueless about personal finance. I have to do the maths for them to demonstrate how mad they are to opt out of the company pension scheme (which has a SS option and employer matching). 

There is a culture of ignorance when it comes to personal finance (alas). Primarily I feel like that is a parental responsibility to pass on those life skills, but there should also be a safety net within the education system to catch those people who will fall through the net otherwise, and won't enjoy that kind of preparation for daily life from home.

There's absolutely no doubt in my experience that there are many people who could take advantage of these schemes, but don't have the confidence or the knowhow to partake, and will think that S&S ISAs are just for rich people, or they need £20K laying around.

Band7

Altior said:

  

There's a section of society that feels entitled without putting in the work.  

Those that can afford not to work without claiming benefits are entitled to do so. Those capable of working but thinking of living on taxpayer money do have a rough time, as those who have ever claimed working age benefits will know all too well. Those not capable of working, for whatever reason - children, senior, disabled - are entitled not to work, without feeling guilty/

Altior said:

 
If you're born a female in this country, and happy to have a number of children, it's entirely possibly to go from cradle to grave, without doing a minute's work, and live a pretty comfortable life. ISA or no ISA. 

Were you actually meant to suggest that stay-at-home mums don't do a minute's work, and that they don't deserve a comfortable life?

Band7

Altior said:

Anecdotal, but most of the people I work with are younger than me. It's a fintech firm, and a certain level of intelligence is needed to get in the door. Not mentioning that to big myself up, just to observe that they aren't of low intelligence. 

Most of the young people are absolutely clueless about personal finance. I have to do the maths for them to demonstrate how mad they are to opt out of the company pension scheme (which has a SS option and employer matching). 

There is a culture of ignorance when it comes to personal finance (alas). Primarily I feel like that is a parental responsibility to pass on those life skills, but there should also be a safety net within the education system to catch those people who will fall through the net otherwise, and won't enjoy that kind of preparation for daily life from home.

There's absolutely no doubt in my experience that there are many people who could take advantage of these schemes, but don't have the confidence or the knowhow to partake, and will think that S&S ISAs are just for rich people, or they need £20K laying around.

It's absolutely the failure of our education system if young people are clueless about personal finance. To some extent, it's also the parents' responsibility, but as they never got the education themselves, they may not have the skills to teach their children. The question is then - how do we get enough teachers with enough financial skills.........