4 ISA's maturing late October --- reinvest for 1 year or do 2 years in case Budget brings bad news

TOMHAYDOCK

Hi , Between my wife & myself we both have over £100k in cash ISA's maturing late October across 4 ISA's. Then another 4 of a lower total, maturing in April & May next year.

Nervous ,with regard to the rumour mill, on what restrictions R.R. may or may not bring in for her first budget.

Wondering if best re investing the October ones for 2 years in case she brings in restrictions like a £100k lifetime limit ,as it would keep the bulk 'safe' for 2 years tax free as I guess if its invested already the budget wont effect it.

What are people thinking is the best 'hedge your bets' on keeping the max tax free for as long as possible?

Thanks

kempiejon

I heard the reds will take your first born before Christmas. 
How will any imagined changes to limits not apply to you by locking away for a fixed term account if you exceed those rumoured restrictions?
Do what is most suitable for your plans.
Like the guide says "Don't panic" 

Albermarle

I would ignore all the frenzied guesswork about the budget and just make your decision as if the budget was not happening. 

poseidon1

I have not used my £20k ISA allowance for this year as yet. A reduction to this generous contribution level would slow the significant tax loss to the Exchequer ( cost £6.7 billion in loss taxes in 2023/24 up from £4.9 billion previously).

I think I  would feel aggrieved with myself in not utilising the current limit if there were a significant reduction thereto announced next month. Tax free isa income is a very important component in growing my net annual income, but I accept only a small percentage of relatively well heeled investors have the means to contribute at that level every year  so a reduction is unlikely to attract widespread approbrium ( unless coupled with  a low overall cap).

The £5k Brit ISA was quickly dropped by Labour ( quite justifiably I might add), but as for the main £20k allowance it would seem wise for those who have not availed themselves of it as yet to do so as a precautionary measure before the budget. Nothing loss by doing so, but potentially many years of tax free income and gains by bringing forward the investment decision, rather than leaving it as a traditional mad rush just before the tax year end in April.  I have been suggesting this to friends and relatives and don't consider it imprudent to do so.

Just a thought.

slinger2

Difficult to believe that anything could change in 24/25 since it would be impractical for the providers and HMRC to cope with it. The simplest thing would be to cut the £20k from next April. This is the 8th year in a row it's been at that level so it's already been whittled away somewhat by inflation. Of course the £20k is an annual allowance and there's more and more money actually in ISAs. Currently £750 billion and that will continue growing if there are no changes.

kempiejon

poseidon1 said:

I have not used my £20k ISA allowance for this year as yet. A reduction to this generous contribution level would slow the significant tax loss to the Exchequer ( cost £6.7 billion in loss taxes in 2023/24 up from £4.9 billion previously).
......

Nothing loss by doing so, but potentially many years of tax free income and gains by bringing forward the investment decision, rather than leaving it as a traditional mad rush just before the tax year end in April.  I have been suggesting this to friends and relatives and don't consider it imprudent to do so.

Just a thought.

Good reminder, I like to have a couple of regular saver maturing in and around the new tax year - though maturity creep has led to this year's being available in June. I also sell any unsheltered stocks with gains in March so I can get a fair portion of my £20k filled early on. Then a monthly SO to fill before April if no lump sums left. That way I benefit from more of the year of tax free gains - rather than join in that mad rush.

So we should all get allowance in sooner rather than later, no risk there I can see and a benefit of more of your wealth sheltered for longer. Sometimes cash flow doesn't allow that mind.

I'll take my own advice and move some cash savings about to fill the balance of my allowance before the budget.

jimjames

poseidon1 said:

I have not used my £20k ISA allowance for this year as yet. A reduction to this generous contribution level would slow the significant tax loss to the Exchequer ( cost £6.7 billion in loss taxes in 2023/24 up from £4.9 billion previously).

If you've not used the ISA allowance yet, why not? If you've got cash elsewhere to pay in then it would make sense to do so but if you don't have the funds to do that it's neither here nor there. I can definitely see something being looked at for a contribution limit, £20k pa indefinitely doesn't seem defensible and is way above allowances in other countries.