Flexible Isa to reduce tax on savings which may, with interest rates 'soaring', become taxable.

Albermarle

boingy said:

jimjames said:
 far more likely that allowance removed completely.

I've been pondering whether that might happen, especially as we're probably heading for a new govt next year That govt will be looking to boost their income and what better way to do it than to fiddle with savings rules and tax allowances and the like - stuff that many people don't really understand.

On the other hand there have been numerous articles in the Express, Mail, Telegraph etc about 'tax raid on savings', so I think  they would struggle top get away with removing the PSA.
Probably will not be increased though. In fact along with ISA's you can shelter more savings interest from tax in the UK than almost any other country. Although that does not stop people moaning...

boingy

Albermarle said:

boingy said:

jimjames said:
 far more likely that allowance removed completely.

I've been pondering whether that might happen, especially as we're probably heading for a new govt next year That govt will be looking to boost their income and what better way to do it than to fiddle with savings rules and tax allowances and the like - stuff that many people don't really understand.

On the other hand there have been numerous articles in the Express, Mail, Telegraph etc about 'tax raid on savings', so I think  they would struggle top get away with removing the PSA.
Probably will not be increased though. In fact along with ISA's you can shelter more savings interest from tax in the UK than almost any other country. Although that does not stop people moaning...

I do see what you are saying but never underestimate the capacity for politicians to be weaselly. I don't think they would get away with messing with the ISA allowances and rules too much. They could reduce the PSA or add a sneaky caveat that meant no-one can realistically use the full amount. There is also the Starting Rate for Savings which is not very widely known about at all. That's exactly the sort of thing they could squeeze without too much adverse publicity. A new chancellor is going to have some tough decisions to make and the "lost tax" on interest is going to look attractive now that interest rates are higher.

If pressed they would portray it as removing a small tax break for rich savers to help poor, beleaguered, hard-working mortgage payers etc etc. 

I'm not saying it will happen but I'm certainly going to maximise my cash ISA holdings in before the end of next year, even if it is at the expense of a slight reduction in interest.

Dazed_and_C0nfused

boingy said:

Albermarle said:

boingy said:

jimjames said:
 far more likely that allowance removed completely.

I've been pondering whether that might happen, especially as we're probably heading for a new govt next year That govt will be looking to boost their income and what better way to do it than to fiddle with savings rules and tax allowances and the like - stuff that many people don't really understand.

On the other hand there have been numerous articles in the Express, Mail, Telegraph etc about 'tax raid on savings', so I think  they would struggle top get away with removing the PSA.
Probably will not be increased though. In fact along with ISA's you can shelter more savings interest from tax in the UK than almost any other country. Although that does not stop people moaning...

I do see what you are saying but never underestimate the capacity for politicians to be weaselly. I don't think they would get away with messing with the ISA allowances and rules too much. They could reduce the PSA or add a sneaky caveat that meant no-one can realistically use the full amount. There is also the Starting Rate for Savings which is not very widely known about at all. That's exactly the sort of thing they could squeeze without too much adverse publicity. A new chancellor is going to have some tough decisions to make and the "lost tax" on interest is going to look attractive now that interest rates are higher.

If pressed they would portray it as removing a small tax break for rich savers to help poor, beleaguered, hard-working mortgage payers etc etc. 

I'm not saying it will happen but I'm certainly going to maximise my cash ISA holdings in before the end of next year, even if it is at the expense of a slight reduction in interest.

Gordon Brown came unstick in this area a few years back

https://www.theguardian.com/politics/2008/apr/30/economy.gordonbrown

boingy

Dazed_and_C0nfused said:

boingy said:

Albermarle said:

boingy said:

jimjames said:
 far more likely that allowance removed completely.

I've been pondering whether that might happen, especially as we're probably heading for a new govt next year That govt will be looking to boost their income and what better way to do it than to fiddle with savings rules and tax allowances and the like - stuff that many people don't really understand.

On the other hand there have been numerous articles in the Express, Mail, Telegraph etc about 'tax raid on savings', so I think  they would struggle top get away with removing the PSA.
Probably will not be increased though. In fact along with ISA's you can shelter more savings interest from tax in the UK than almost any other country. Although that does not stop people moaning...

I do see what you are saying but never underestimate the capacity for politicians to be weaselly. I don't think they would get away with messing with the ISA allowances and rules too much. They could reduce the PSA or add a sneaky caveat that meant no-one can realistically use the full amount. There is also the Starting Rate for Savings which is not very widely known about at all. That's exactly the sort of thing they could squeeze without too much adverse publicity. A new chancellor is going to have some tough decisions to make and the "lost tax" on interest is going to look attractive now that interest rates are higher.

If pressed they would portray it as removing a small tax break for rich savers to help poor, beleaguered, hard-working mortgage payers etc etc. 

I'm not saying it will happen but I'm certainly going to maximise my cash ISA holdings in before the end of next year, even if it is at the expense of a slight reduction in interest.

Gordon Brown came unstick in this area a few years back

https://www.theguardian.com/politics/2008/apr/30/economy.gordonbrown

Hehe. He came unstuck in a few other ways too. But all cabinet ministers are temporary. They turn up, screw up and move on. It's just a question of how badly they screw up and how quickly they move on. 

Freebird53

Re: Increasing or scrapping personal savings allowance:-

https://www.thisismoney.co.uk/money/saving/article-12282665/When-savers-need-file-tax-return.html

"It really is in the Government's interest to lift the personal savings allowance in line with rising interest rates, it would have saved it a whole lot of grief. "

Maybe it's not just wishful thinking?

Stargunner

Freebird53 said:

I appreciate the comments, but in perspective, i'd gain more by switching my current account, something else which is too much hassle! If ISA rates were comparable to non-ISA rates.....

Either way, i'll be able to use my personal tax allowance next year...

It takes 30 mins to an hour of your time to switch a bank account for circa £200.

Newly_retired

Nothing is too much hassle if it saves you a decent amount of money. Switching accounts and opening an ISA is not hassle.

eskbanker

Freebird53 said:

Re: Increasing or scrapping personal savings allowance:-

https://www.thisismoney.co.uk/money/saving/article-12282665/When-savers-need-file-tax-return.html

"It really is in the Government's interest to lift the personal savings allowance in line with rising interest rates, it would have saved it a whole lot of grief. "

Maybe it's not just wishful thinking?

Seems very much wishful thinking to me when a tax adviser opines that their life would be easier if there was a higher threshold, so that comment ought to be taken with a substantial pinch of salt rather than being seen as representative of government policy!

Freebird53

@Stargunner: 30 minutes to an hour you say? If all goes well perhaps, but what if it does not? Endless hours on the phone to various organisations trying to sort the mess out. A good deal of time getting to know the app/online banking facilty, and all its quirks...

@Newly_retired: I often wonder at people's determination to project their own values onto others. It may not be hassle for you. Saving money, is but a part of the equation...

Freebird53

eskbanker said:

Freebird53 said:

Re: Increasing or scrapping personal savings allowance:-

https://www.thisismoney.co.uk/money/saving/article-12282665/When-savers-need-file-tax-return.html

"It really is in the Government's interest to lift the personal savings allowance in line with rising interest rates, it would have saved it a whole lot of grief. "

Maybe it's not just wishful thinking?

Seems very much wishful thinking to me when a tax adviser opines that their life would be easier if there was a higher threshold, so that comment ought to be taken with a substantial pinch of salt rather than being seen as representative of government policy!

Point taken, but as referred to in the article, surely HMRC will not be relishing the extra workload either....