Do You Have The Resources To Invest 20,000 Per Year Into An ISA?

nubian

With the possibility of the chancellors roll back of the £20,000 p.a ISA allowance, It crossed my mind that this would affect only a tiny fraction of the working population of the UK. So what could she gain by doing this and isnt it an insulting irrelevance to the vast majoirty of Nritish people who at best are living pay cheque to pay cheque. What do you think?

masonic

There are no plans to roll back the £20k p.a. ISA allowance (that limit has been frozen), only limit how much can be put in the cash component.

It probably is insulting to those living pay cheque to pay cheque that a tiny fraction are being given this tax break, but the reason for reducing the amount that can be saved into a cash ISA is that "the city" wants more people to invest alongside saving.

Your poll says "do you or anyone you know...", while the options relate only to the voter, so which do you want? Bearing in mind the results here are likely to be highly skewed.

nubian

You

masonic said:

There are no plans to roll back the £20k p.a. ISA allowance (that limit has been frozen), only limit how much can be put in the cash component.

It probably is insulting to those living pay cheque to pay cheque that a tiny fraction are being given this tax break, but the reason for reducing the amount that can be saved into a cash ISA is that "the city" wants more people to invest alongside saving.

Your poll says "do you or anyone you know...", while the options relate only to the voter, so which do you want? Bearing in mind the results here are likely to be highly skewed.

You are of course correct and I have adjusted the headline question. It was meant to be a light hearted poll, though albeit a serious topic. I see little benefit for us ordinary savers just exposure to more risk, is this an additional price the chancellor wants us to bear on top of being amongst the most taxed workforce on the planet relative to what we as a society get back. I would also hate to go down the route of 401k's that so many Americans have. It seems to me Rachel Reeves is trying to force more of us even those with meagre savings to entrust this to the money men who really don't have our interests at heart.

Flugelhorn

I will  keep the bulk my money away from investments if at all possible - was hit by the endowment saga, fortunately was able to cover the gaps created by  the dismal returns etc but decided never to do similar again. 

friolento

If it would only affect a tiny minority of people, why would those living from paycheque to paycheque be insulted if something they can’t ever use is taken away from them? 

Without seeing the actual / forecast numbers, it’s not possible to know whether there would/could be a noticeable financial benefit to the treasury, or to the lobbying industry, if she reduces the cash ISA limit.  

Keep_pedalling

I can’t tick any of those options. We used to put £20k in each of our ISAs each year until we exhausted our GIAs. We are now at the point in our lives where we are spending rather than saving so won’t be adding to them again. 

Exodi

nubian said:

With the possibility of the chancellors roll back of the £20,000 p.a ISA allowance, It crossed my mind that this would affect only a tiny fraction of the working population of the UK. So what could she gain by doing this and isnt it an insulting irrelevance to the vast majoirty of Nritish people who at best are living pay cheque to pay cheque. What do you think?

This is riddled with issues...

Firstly, you're on a financial forum, which specialises in savings. It is obvious that forumgoers will not be representative of the wider general public, many of whom will have no ability, or desire, to save.

E.g. As of the time of writing this, of the 15 respondents so far, 80% suggest being able to save £5k-£20k p/a.

I expect if you ask 15 people on the street, you would struggle to get a similar ratio (unless you were asking around Mayfair, I expect). You acknowledge this where you mention 'the vast majority of British people who at best are living pay cheque to pay cheque", so I'm not sure what purpose the poll serves.

Secondly, it's a bit of tipsy turvy logic to suggest "it doesn't affect the majority of people" therefore they shouldn't care? By this logic, why not remove all taxes on billionaires, they shouldn't care as it doesn't affect the majority of people, right? In complete contrast to your suggestion that it's 'an insulting irrelevance' (which to be honest makes absolutely no sense to me) I'd go as far as suggesting the British public are typically in strong support of measures that don't affect them (of course, part of this is for selfish reasons).

Thirdly, unless I'm mistaken, the speculation was around reducing the amount that can be deposited into a Cash ISA to £4k (rather than the wider ISA allowance, I've seen nothing to suggest you wouldn't still be able to hit £20k with a S&S ISA). The logic is that why should the government (and by extension the taxpayer) allow tax free and relatively risk free interest to those with relatively considerable disposable income. I refute that the general public does not care as it does not affect them - you only need to look at the non-dom stuff of yesteryear.

mostilts

Relatively new here. I am trying to beat the Chancellor’s possible reduction in annual cash isa allowance soon, but don’t have £20K ready cash to use but will have in due course this year. But I already hold a substantial funds in a Flexible Cash ISA, so I will temporarily transfer £20K from my existing Flexible Cash ISA to my current account, then open a new Flexible Cash ISA to use this year’s full allowance before the Chancellor acts. As funds become available over the year I’ll replace the funds in my original Flexible Cash ISA.

jimjames

Flugelhorn said:

I will  keep the bulk my money away from investments if at all possible - was hit by the endowment saga, fortunately was able to cover the gaps created by  the dismal returns etc but decided never to do similar again. 

Seems like cutting your nose off to spite your face. Current investment options are nothing like endowments.

dunstonh

Flugelhorn said:

I will  keep the bulk my money away from investments if at all possible - was hit by the endowment saga, fortunately was able to cover the gaps created by  the dismal returns etc but decided never to do similar again. 

The issue with endowments was not dismal returns.   It was how they were set up and the lack of flexibility to adapt.

e.g.   Two endowments set up using the same investment fund.      The investment fund returned 6% p.a. on both of them as it was the same fund.   However, one endowment fell short.  They other paid a surplus.   Logically, the person paid the surplus would be happy and the one that was short would be unhappy.    The difference would be the target growth rate put in place at the start that decided the premium to be paid and how much would go to the investment element.     One could have a 3% target growth rate (so 6% return would pay surplus) and the other could have a 12% target growth rate and would result in a shortfall.

Once an endowment was set up it could not be adjusted.   It was a flaw in their product type.

Not investing because of misunderstanding the endowment issue has cost you money.  

Exodi

mostilts said:

Relatively new here. I am trying to beat the Chancellor’s possible reduction in annual cash isa allowance soon, but don’t have £20K ready cash to use but will have in due course this year. But I already hold a substantial funds in a Flexible Cash ISA, so I will temporarily transfer £20K from my existing Flexible Cash ISA to my current account, then open a new Flexible Cash ISA to use this year’s full allowance before the Chancellor acts. As funds become available over the year I’ll replace the funds in my original Flexible Cash ISA.

I'd suggest you're being a bit hasty. The Chancellor wouldn't jump out from behind a curtain and announce it effectively immediately. I expect if it were to happen, any announcement would almost certainly coincide it's introduction with a new tax year (just for complexity sake).

If I were you, I'd probably just drip feed into it as you are able to during the year.

Perhaps I'm just jaded by people making decisions based on speculation. It gives memories of people cashing in their pensions on headline grabbing statements like 'Labour is coming for your pensions' and then asking on here after for advice on how to reverse the decision.