Reeves' ISA review

wmb194

Shylock_249 said:

Maybe someone has told Reeves that investments can go up and down and people might NOT get back what they put in them!😂😂

It wouldn't be much of a vote winner if investors placed their 16k (20k - 4k) cash each year into stocks and shares as suggested and had it valued just before the next general election to find that it was worth a lot less than they invested.  It would be hard to tell such investors that it is a long term investment and certainly every other political party would use it as a stick to whip her.

It wouldn’t be difficult, they would say that in the long run investments tend to outperform cash but there can be periods of underperformance.

Plus there are warnings plastered everywhere on investment platforms and fund literature that you might get back less than you invest.

Hoenir

wmb194 said:

Shylock_249 said:

Maybe someone has told Reeves that investments can go up and down and people might NOT get back what they put in them!😂😂

It wouldn't be much of a vote winner if investors placed their 16k (20k - 4k) cash each year into stocks and shares as suggested and had it valued just before the next general election to find that it was worth a lot less than they invested.  It would be hard to tell such investors that it is a long term investment and certainly every other political party would use it as a stick to whip her.

It wouldn’t be difficult, they would say that in the long run investments tend to outperform cash but there can be periods of underperformance.

Chose the wrong market and the periods of underperfornance can be extremely long. The post GFC QE era is still freshly imprinted in people's mind's. An expectation that the good times are going to roll on and on. 

x44

Japan's Nikkei 225 index being an extreme case in point.

Reached a peak of 35000 in 1989 and took till Jan 2024 to exceed that number for the first time since 1989.

wmb194

Hoenir said:

wmb194 said:

Shylock_249 said:

Maybe someone has told Reeves that investments can go up and down and people might NOT get back what they put in them!😂😂

It wouldn't be much of a vote winner if investors placed their 16k (20k - 4k) cash each year into stocks and shares as suggested and had it valued just before the next general election to find that it was worth a lot less than they invested.  It would be hard to tell such investors that it is a long term investment and certainly every other political party would use it as a stick to whip her.

It wouldn’t be difficult, they would say that in the long run investments tend to outperform cash but there can be periods of underperformance.

Chose the wrong market and the periods of underperfornance can be extremely long. The post GFC QE era is still freshly imprinted in people's mind's. An expectation that the good times are going to roll on and on. 

So you think everyone should stick to cash? It isn't all or nothing anyway but these days most people will be directed towards global trackers. There won't be much choosing involved. 

jimjames

Shylock_249 said:

Maybe Reeves will surprise us all by raising the allowance of 20k in line with inflation dating back to when it was implemented in in fy 17/18 (unless my memory has failed me) to let's say 30k a year........

Or base it on inflation from when they were originally launched and cut them to a similar number to the ones being mentioned. The £3k in 1999 would be £5700 now according to BoE

Alpine_Star

From the FT on her Mansion House speech.

I for one don't think taking investment advice from banks should be encouraged.

george4064

Alpine_Star said:

From the FT on her Mansion House speech.

I for one don't think taking investment advice from banks should be encouraged.

Slightly nuanced, but I thought it's encouraging banks to give customers nudges and tips to encourage them to invest rather than actually giving them advice?

Alpine_Star

george4064 said:

Alpine_Star said:

From the FT on her Mansion House speech.

I for one don't think taking investment advice from banks should be encouraged.

Slightly nuanced, but I thought it's encouraging banks to give customers nudges and tips to encourage them to invest rather than actually giving them advice?

Slightly nuanced yes but either way it can be a fine line.

As I understand it the idea is to target those holding low interest bearing savings accounts - ie the less financially sophisticated. Not a good idea in my view. 

Leeds Reforms to rewire financial system, boost investment and create skilled jobs across UK - GOV.UK

ColdIron

I remember having a close shave with a 'financial advisor' from Barclays in the mid-noughties when they tried to convince me that one of their structured products was a better choice than the cash ISA I was trying to replace. Guaranteed return and tax free they told me. They kept pressing the point that 'It's the same as your ISA'

Ocelot

x44 said:

Japan's Nikkei 225 index being an extreme case in point.

Reached a peak of 35000 in 1989 and took till Jan 2024 to exceed that number for the first time since 1989.

It took the FTSE 100 over 20 years to match its 1999 index value.