If Cash ISAs are ended by Government.

Veteransaver

It's highly unlikely they'll make any retrospective changes as ISAs are such a huge part of people's retirement planning. 

Ocelot

Kim_13 said:

I have long been in favour of a cut to £6,000 or £12,000, given it’s clearly madness to be able to save more tax free per year than you can actually earn. Either of those would make the limit divisible equally by 12, as Alistair Darling made a point of ensuring at one time. 

£4,000 would be going back to 2010 ish and not equally divisible, so hopefully that isn’t the number.

As I pointed out earlier, 20k is useful to put expiring non-ISAs into. You don't have to save 20k of new money a year.

booneruk

The Telegraph headline: "Rachel Reeves considers cutting cash Isa limit to £4000" which is dripping with clickbait intent. The subheading does better: "Chancellor urged to reduce tax relief and steer savers to riskier investments"

The chancellor will be receiving suggestions all the time, doesn't mean we need a doom and gloom "This is happening" type headline each time. We had the same nonsense with the pensions system a few months ago.

At least the Guardian is a bit more grounded with their headline: "Savings providers vow to fight any attempt to cut cash Isa limit to £4,000". 

I think people would be well advised to never take a Telegraph headline literally.

Aretnap

Ocelot said:

Kim_13 said:

I have long been in favour of a cut to £6,000 or £12,000, given it’s clearly madness to be able to save more tax free per year than you can actually earn. Either of those would make the limit divisible equally by 12, as Alistair Darling made a point of ensuring at one time. 

£4,000 would be going back to 2010 ish and not equally divisible, so hopefully that isn’t the number.

As I pointed out earlier, 20k is useful to put expiring non-ISAs into. You don't have to save 20k of new money a year.

Though if you have many multiples of £20K lying around in non-ISA accounts waiting to move into ISAs, then clearly either

(1) At some point in your life you must have been earning enough to save many thousands of pounds of new money per year - presumably well over the ISA allowance or it would be in ISAs already; or
(2) At some point in your life you must have been fortunate enough to have had a very large windfall from somewhere

Either way good luck to you and well done, but equally either way "why is the government taxing the meagre savings of a poor, impoverished person like me?" wouldn't really be the line to take.

ZeroSum

Aretnap said:

Ocelot said:

Kim_13 said:

I have long been in favour of a cut to £6,000 or £12,000, given it’s clearly madness to be able to save more tax free per year than you can actually earn. Either of those would make the limit divisible equally by 12, as Alistair Darling made a point of ensuring at one time. 

£4,000 would be going back to 2010 ish and not equally divisible, so hopefully that isn’t the number.

As I pointed out earlier, 20k is useful to put expiring non-ISAs into. You don't have to save 20k of new money a year.

Though if you have many multiples of £20K lying around in non-ISA accounts waiting to move into ISAs, then clearly either

(1) At some point in your life you must have been earning enough to save many thousands of pounds of new money per year - presumably well over the ISA allowance or it would be in ISAs already; or
(2) At some point in your life you must have been fortunate enough to have had a very large windfall from somewhere

Either way good luck to you and well done, but equally either way "why is the government taxing the meagre savings of a poor, impoverished person like me?" wouldn't really be the line to take.

There was the period when rates were rock bottom, and generally ISAs weren't as generous as taxable savings accounts, so it wasn't worth the effort putting into ISAs. There's also the issue around flexibility, in that now you can open as many ISAs as you want. Previously you could only do the one.
I do a bit of stoozing & this year is the first time I've utilised ISAs for the above reasons. Reducing cash bit to 4k wouldn't be great for my stoozing endeavours. If they do go back to the mini & maxi isas, then hopefully IFISAs will be included in the maxi isa.

Altior

booneruk said:

The Telegraph headline: "Rachel Reeves considers cutting cash Isa limit to £4000" which is dripping with clickbait intent. The subheading does better: "Chancellor urged to reduce tax relief and steer savers to riskier investments"

The chancellor will be receiving suggestions all the time, doesn't mean we need a doom and gloom "This is happening" type headline each time. We had the same nonsense with the pensions system a few months ago.

At least the Guardian is a bit more grounded with their headline: "Savings providers vow to fight any attempt to cut cash Isa limit to £4,000". 

I think people would be well advised to never take a Telegraph headline literally.

They both imply the same thing. 

One is very sympathetic to the current political administration, the other is not. Up to July last year it would have been the other way around. 

The spin is irrelevant. It's reasonable to assume this 'idea' has actually been pitched to the current government, and it hasn't been dismissed. This is how modern politics works, kite flying and softening up. It doesn't mean any of it will happen, but it is being tested. 

jimexbox

The 4k cash limit article is classic expectation management. It's so ridiculous, if nothing happens or let's say 17k cash, 3k ss ISA split. Everyone will say, 'ah, that's not too bad.' 

jimexbox

Kim_13 said:

I have long been in favour of a cut to £6,000 or £12,000, given it’s clearly madness to be able to save more tax free per year than you can actually earn. Either of those would make the limit divisible equally by 12, as Alistair Darling made a point of ensuring at one time. 

£4,000 would be going back to 2010 ish and not equally divisible, so hopefully that isn’t the number.

Let's remember folk who use cash ISA's are saving money that's already been taxed. I'll just make extra contributions to my pension. 

Kim_13

jimexbox said:

Kim_13 said:

I have long been in favour of a cut to £6,000 or £12,000, given it’s clearly madness to be able to save more tax free per year than you can actually earn. Either of those would make the limit divisible equally by 12, as Alistair Darling made a point of ensuring at one time. 

£4,000 would be going back to 2010 ish and not equally divisible, so hopefully that isn’t the number.

Let's remember folk who use cash ISA's are saving money that's already been taxed. I'll just make extra contributions to my pension. 

I understand that and have felt it would be a way of paying for some sort of increase to the personal allowance. I wasn’t suggesting that savers should be taxed just because it’s unearned income (government definition used in UC etc by administrations of all political colours; I would call it earned because providers tell you that you earn interest from the day they receive your money, etc.)

Altior

Savings interest most times only just about maintains the purchasing value of cash. Many periods of history where it hasn't even achieved that. Very strong argument in my view that savings interest should not be taxed at all, that would obviously render cash ISAs obsolete.