If Cash ISAs are ended by Government.

jimjames

Shylock_249 said:
 I wonder how many people who have habitually saved 20k each year will take up the offer and invest their 16k into UK S&S ISAs bearing in mind the Office for Budget Responsibility predicts just 1% growth this year.

A common misconception is that UK equities only relate to the UK economy. For FTSE100 it's around 70% of their income is from outside the UK, obviously the FTSE250 is more UK biased but still has overseas income.

Kim_13

I feel Labour had the right balance in their last year in power in the 2000s - Cash and Shares were 50/50, with some adjustments to allowances made for age (in the current context that could be adding 1% to the Cash part for every year of age past 50 or 55, for example.) 

The optics would be terrible if they went further than when ISAs were introduced in 1999 - when just under 43% could be cash. Carrot should be used to increase investing in the UK, not stick - especially for now when the growth forecast is so dire, and as we know the further out the prediction is, the more crystal ball gazing is involved. 

eskbanker

jimjames said:

Shylock_249 said:
 I wonder how many people who have habitually saved 20k each year will take up the offer and invest their 16k into UK S&S ISAs bearing in mind the Office for Budget Responsibility predicts just 1% growth this year.

A common misconception is that UK equities only relate to the UK economy. For FTSE100 it's around 70% of their income is from outside the UK, obviously the FTSE250 is more UK biased but still has overseas income.

Undoubtedly true, but, turning it round the other way, what realistic and effective mechanisms would drive ISA holders towards investments that would more directly benefit the UK economy?

Shylock_249

If Mrs Reeves were to only allow people to invest in S&S ISAs which improved the UK economy she better do her home work if as JimJames says approx 70% of the income from FTSE is from outside the UK, otherwise my argument would be that it would benefit the UK economy more by continuing Cash ISAs where the money is loaned to small UK businesses or home owners. (I don't know if small UK building societies lend money to counties outside of the UK, Moldova perhaps?)

Imagine if the OEIC managers for FTSE Tracker Funds etc had to weed out 70% of the listed companies because the income came from overseas.

Bobblehat

eskbanker said:

jimjames said:

Shylock_249 said:
 I wonder how many people who have habitually saved 20k each year will take up the offer and invest their 16k into UK S&S ISAs bearing in mind the Office for Budget Responsibility predicts just 1% growth this year.

A common misconception is that UK equities only relate to the UK economy. For FTSE100 it's around 70% of their income is from outside the UK, obviously the FTSE250 is more UK biased but still has overseas income.

Undoubtedly true, but, turning it round the other way, what realistic and effective mechanisms would drive ISA holders towards investments that would more directly benefit the UK economy?

"Sir, Sir!"(Holds hand up in an enthusiastic schoolboy manner) ... "Is the answer NONE, Sir?"

I'll get my coat ......

wmb194

eskbanker said:

jimjames said:

Shylock_249 said:
 I wonder how many people who have habitually saved 20k each year will take up the offer and invest their 16k into UK S&S ISAs bearing in mind the Office for Budget Responsibility predicts just 1% growth this year.

A common misconception is that UK equities only relate to the UK economy. For FTSE100 it's around 70% of their income is from outside the UK, obviously the FTSE250 is more UK biased but still has overseas income.

Undoubtedly true, but, turning it round the other way, what realistic and effective mechanisms would drive ISA holders towards investments that would more directly benefit the UK economy?

I think the idea is to boost trading volumes on the LSE. It might persuade more companies to list there and have primary issuance - IPOs, rights issues and debt - which might be invested in the economy. Plus a bit more stamp duty for the government would be nice (for it).

wmb194

Shylock_249 said:

If Mrs Reeves were to only allow people to invest in S&S ISAs which improved the UK economy she better do her home work if as JimJames says approx 70% of the income from FTSE is from outside the UK, otherwise my argument would be that it would benefit the UK economy more by continuing Cash ISAs where the money is loaned to small UK businesses or home owners. (I don't know if small UK building societies lend money to counties outside of the UK, Moldova perhaps?)

Imagine if the OEIC managers for FTSE Tracker Funds etc had to weed out 70% of the listed companies because the income came from overseas.

Small BS' survived when the cash element was restricted to £7k and less per year so no reason to think they couldn't continue to. IIRC the original PEP restricted investments to securities listed in London and it's the waning LSE that people are worried about. Gilts are listed on the LSE so if you want something cash-like there would be those.