City firms urge Reeves to scale back cash ISA’s

Kotokos

badmemory said:

It is however extremely unlikely that I will live another 20 years until I am 98.  It is also quite likely that I will need access to those funds before I do pop my clogs.

It's is however extremely unlikely that the notion was conceived with solely yourself in mind. 

jimjames

subjecttocontract said:

badmemory said:

Surely stock market & ISAs have completely different purposes.  The stock market needs to be a much longer term commitment, whereas even a fixed term ISA needs only be for a year.  I certainly could not commit to a minimum of 5 years & even more could not take the risk with my savings.

Good point.
It's ridiculous to think of a cash ISA in the same way as a stocks & shares ISA. The elderly won't want the risk of investing in a stocks & shares ISA.

Sorry but that's nonsense to lump "the elderly" into one category. What age are "the elderly" anyway? My parents are in their 80s and both have substantial S&S ISA portfolios. Maybe someone who has never invested before might not but many retired people already have investments especially with the pension freedoms from 2015.

As mentioned in the other thread when ISAs were introduced the limit for S&S ISAs was over double that for cash, £3k vs £7k. It's only more recently they've been equalised so splitting as £10k cash £20k S&S would restore that original differential.

happybagger

jimjames said:

Sorry but that's nonsense to lump "the elderly" into one category. My parents are in their 80s and both have substantial S&S ISA portfolios.

Whether it would be sensible for people in their 80s to add further that rather than to cash isas is a different view.

There's a difference between having, and investing in.

Altior

Grumpy_chap said:

Altior said:

At least Rachel from accounts, and her advisers will have access to this data.

That seems a rather odd table.

The obvious thing is individuals were clearly able to state more than one reason as the percentages total more than 100.

It also seems to me as though several of the categories are, essentially, the same thing: Rainy Day; Unexpected expense / event; Change of household income (which I assume means job loss or illness).
I'd also suggest that non-pension retirement saving could be expected to be low if people have (or believe they have) adequate pension provision through workplace schemes.

The fact that some of the reasons seem to overlap isn't really the point. None of them appear to point to medium/long term capital appreciation, that's the point. 

I suppose it would be reasonably interesting to see a similar table in regard to the reasons why individuals contribute to equities/bond funds. They shouldn't ordinarily be for a rainy day, planned or unexpected expenses, potential loss of income for example. 

It's difficult to see how an intelligent argument can be made for people saving for the reasons listed should switch to a more volatile option. Arguably retirement, but even in retirement people should have a slab of cash as a base. I can see how people who make lots of money scalping stock market investments could make an argument for it, though!

subjecttocontract

jimjames said:

subjecttocontract said:

badmemory said:

Surely stock market & ISAs have completely different purposes.  The stock market needs to be a much longer term commitment, whereas even a fixed term ISA needs only be for a year.  I certainly could not commit to a minimum of 5 years & even more could not take the risk with my savings.

Good point.
It's ridiculous to think of a cash ISA in the same way as a stocks & shares ISA. The elderly won't want the risk of investing in a stocks & shares ISA.

Sorry but that's nonsense to lump "the elderly" into one category. What age are "the elderly" anyway? My parents are in their 80s and both have substantial S&S ISA portfolios. Maybe someone who has never invested before might not but many retired people already have investments especially with the pension freedoms from 2015.

As mentioned in the other thread when ISAs were introduced the limit for S&S ISAs was over double that for cash, £3k vs £7k. It's only more recently they've been equalised so splitting as £10k cash £20k S&S would restore that original differential.

Well I was under the impression that the story involved NEW money and my comment was based on myself. I've spent years investing in S&S but now I'm retired & in my seventies I'm certainly not interested in putting any more cash into S&S......and neither do other retirees I know.

badmemory

Kotokos said:

badmemory said:

It is however extremely unlikely that I will live another 20 years until I am 98.  It is also quite likely that I will need access to those funds before I do pop my clogs.

It's is however extremely unlikely that the notion was conceived with solely yourself in mind. 

Totally agree - but why should I be penalised just because I am old & have done what I needed to do to protect my older self.  Perhaps I should just spend it all & make someone else pay for my older care, it seems to be the norm now.

subjecttocontract

When Reeves considers the advantages of reducing cash ISA deposits to less than £20K, she might conclude that the negatives outweigh the positives. She might say it's all about growing the economy but we know it's really about votes. Any reduction in tax free savings options for older people will go down like a lead balloon.

Kim_13

badmemory said:

Kotokos said:

badmemory said:

It is however extremely unlikely that I will live another 20 years until I am 98.  It is also quite likely that I will need access to those funds before I do pop my clogs.

It's is however extremely unlikely that the notion was conceived with solely yourself in mind. 

Totally agree - but why should I be penalised just because I am old & have done what I needed to do to protect my older self.  Perhaps I should just spend it all & make someone else pay for my older care, it seems to be the norm now.

That could leave you open to deprivation of capital allegations, and going without care. The only way to safely have no savings is never having had any. 

If the chancellor has any sense, then if she wishes to accept this suggestion, a pensioner would have their allowance unchanged while those of working age were limited to say £10,000 cash and £10,000 S&S. Pensioners had a higher personal allowance under Labour previously, so it would make sense to not make changes that push people to take risks that are likely to be irresponsible in their circumstances.

Though Vanguard joining the charging minimum amounts per year party doesn’t exactly encourage people to invest what they can afford to put aside. More like don’t bother until you can do so without paying a disproportionate amount in fees.

Hoenir

subjecttocontract said:

When Reeves considers the advantages of reducing cash ISA deposits to less than £20K, she might conclude that the negatives outweigh the positives. She might say it's all about growing the economy but we know it's really about votes. Any reduction in tax free savings options for older people will go down like a lead balloon.

If the offset of reducing the ISA annual cash allowance is an increase in the annual personal tax allowance. Then a good trade off. 

[Deleted User]

badmemory said:

It is however extremely unlikely that I will live another 20 years until I am 98.  It is also quite likely that I will need access to those funds before I do pop my clogs.

Spot on.

A point nobody ever gets.