Reeves' ISA review

m_c_s

Alexland said:

david72 said:

The plan to disallow ISA transfers from S&S ISAs to Cash ISAs seems very unreasonable

The whole idea seems unreasonable. ISA rules were complicated enough for the average consumer without needlessly limiting people's freedoms to do whatever is suitable for their circumstances.

People don't need this nudge in possibly the wrong direction.

Are there any grown-ups left in the treasury?

Seeking fully developed people with adult minds.

Nope they are all completely useless right now.

You are ofcourse correct but you will have people defending the changes or saying we had this before so suck it up. No, this is clearly a poor policy and it needs to called out as such. People want flexibility not restrictions. The pensions freedoms policy has been a great example of allowing people to choose how to invest and use their own money. The current flexible ISA arrangements while not perfect have been a good complement to these freedoms. This new policy is a backwards step and is not in the best interest of the saver or investor. 

Alexland

m_c_s said:
People want flexibility not restrictions.

Unfortunately what people reasonably want or expect no longer seems to matter. 'These are my choices... blah blah blah'. It's sad to see policy going so obviously wrong and so much uncertainty and damage being caused.

I know MSE is not political but seriously these ISA reforms are so awful in every respect.

Sea_Shell

I heard that on his show on Tuesday 9th December, Martin Lewis will be doing an Investing for Beginners special.

Obviously he has to tread carefully around "Financial Advice", and will probably have an expert on to nod in all the right places.

Be interesting to see what detail he goes (can go) in to.

Alexland

Also less well reported is the reduction in VCT relief down to 20%.

Who is going to buy newly issued VCT shares at NAV to pay around 2% pa in excess management fees for 5 years and then sell at a 5-10% discount for only a 20% relief? My experience of VCT ownership is that even at 30% relief it was barely worth it.

They even acknowledge in the budget that the relief is to "support high-growth companies" so why are they killing the market? These people don't have any perspective on what minimum return investors would require to back small high risk UK companies. The money will go elsewhere.

If they wanted growth they should have restored VCT relief to 40%, or at least 35%.

otherwayup

Alexland said:

Also less well reported is the reduction in VCT relief down to 20%.
... My experience of VCT ownership is that even at 30% relief it was barely worth it.
...

When I invested in my first VCT about a year or so ago, I thought to myself that after the 5yrs it will probably all end up a wash after inflation and the only ones to actually make anything would be the people who sold it to me.

At 20% relief I wouldn't be taking a similar risk and I expect most retail investors will think the same.