Reeves' ISA review

Sea_Shell

MeteredOut said:

Sea_Shell said:

If a lower cash ISA limit came in, I'm guessing that would stop me using T212 in the way I do.

ie, funding via the cash element (debit card), then moving the funds, internally, into the QMMF side.

Rather than funding the Trading account directly.

What's the benefit in doing it that way?

IIRC, the available pay in methods differ between the cash account and the trading account.

I found using a debit card to pay in was easiest.

I can't remember the other ways....goes off to look...

It'll have to wait until I'm on the laptop, as I don't use their app, just desktop.

Sea_Shell

How will they "incentivise" investing in UK companies, over diversified Global funds??

A tad optimistic to think that cash savings will just be diverted to UK equities.

ColdIron

From Martin Lewis today

In the meetings I've had I've been told again and again they want to encourage, especially younger people, to invest. Yet a cash ISA cut would simply p.i.s.s millions of, often older, people off and I doubt will change the dial on investing, it'd just mean more tax paid on saving, and a problem for building societies raising cash for mortgages.

Alpine_Star

ColdIron said:

From Martin Lewis today

In the meetings I've had I've been told again and again they want to encourage, especially younger people, to invest. Yet a cash ISA cut would simply p.i.s.s millions of, often older, people off and I doubt will change the dial on investing, it'd just mean more tax paid on saving, and a problem for building societies raising cash for mortgages.

I think he might have a point. As an older person I want absolute certainty with what I do with my money. I've used my full ISA allowance for long term fixed ISAs for the last few years and plan to continue doing so. If the allowance is cut I'd rather put the balance into fixed rate savings bonds and pay the tax than put it in S&S ISAs. 

Life is just too short!

Albermarle

Shylock_249 said:

I’d like to know how it would “help” the government if I invested 20k in S&S as opposed to 20k in savings?

 As I see it, if the government sold off one of its nationalized industries (are there any left?) and I bought shares directly, on floatation the government it would get the money.  However, if I were to buy existing shares in a company which already has shares, I’d effectively be buying from someone else.

 Is if for consideration that Reeves is NOT concerned that investors could make more money in S&S than savings in a bank but is more interested in lowering the amount which could go into tax free savings and HMRC would tax savers on interest earned on the rest of the savings?

 If she was purely interested that savers could earn more by investing she could just leave things as they are and just educate would be savers, eg make every bank/bs put a proviso in their small print along the lines of “As a saver you realise that you could earn more money by investing in S&S?”

Even better, “As a saver you realise that you could earn more money by investing in S&S and “Remember Railtrack and other failures?”

 

 

 

 

 

Not sure why one failed venture decades ago is relevant.
Clearly anyone invested in diversified mainstream index or multi asset funds, over the last 10 or 15 years is going to be a lot better off than someone who just had cash savings.
It is in the countries interest when its populace is more prosperous, and UK Govts have for years been concerned about the relatively low public involvement in investing.

2010

Most older people are not willing to start risking the turmoil of the stock market when time is not on their side.

eskbanker

Shylock_249 said:

I’d like to know how it would “help” the government if I invested 20k in S&S as opposed to 20k in savings?

“She wants to see people investing more in British stocks because it’s good for growth and it generates better returns for savers,” one ally of Reeves said.

The argument is that investing in UK businesses stimulates growth and in turn this leads to wider economic benefits, including increased employment and lower welfare costs, more tax revenues, improved balance of trade, expanded secondary supply chain activity, etc, etc.  Of course, many UK businesses derive significant income from activities in other countries, so the effects are less pronounced for these....

Shylock_249

eskbanker said:

Shylock_249 said:

I’d like to know how it would “help” the government if I invested 20k in S&S as opposed to 20k in savings?

“She wants to see people investing more in British stocks because it’s good for growth and it generates better returns for savers,” one ally of Reeves said.

The argument is that investing in UK businesses stimulates growth and in turn this leads to wider economic benefits, including increased employment and lower welfare costs, more tax revenues, improved balance of trade, expanded secondary supply chain activity, etc, etc.  Of course, many UK businesses derive significant income from activities in other countries, so the effects are less pronounced for these....

Excellent Answer Thanks

MeteredOut

Sea_Shell said:

MeteredOut said:

Sea_Shell said:

If a lower cash ISA limit came in, I'm guessing that would stop me using T212 in the way I do.

ie, funding via the cash element (debit card), then moving the funds, internally, into the QMMF side.

Rather than funding the Trading account directly.

What's the benefit in doing it that way?

IIRC, the available pay in methods differ between the cash account and the trading account.

I found using a debit card to pay in was easiest.

I can't remember the other ways....goes off to look...

It'll have to wait until I'm on the laptop, as I don't use their app, just desktop.

The standard way is to fund via a linked bank account. How do you even fund it with your debit card?

Kim_13

Shylock_249 said:

 Is if for consideration that Reeves is NOT concerned that investors could make more money in S&S than savings in a bank but is more interested in lowering the amount which could go into tax free savings and HMRC would tax savers on interest earned on the rest of the savings?

 If she was purely interested that savers could earn more by investing she could just leave things as they are and just educate would be savers, eg make every bank/bs put a proviso in their small print along the lines of “As a saver you realise that you could earn more money by investing in S&S?”

Well, yes. A government of whatever colour is going to attempt put a spin onto something to make it appear as though it is for our own good, especially when it is in effect a tax rise. There are always going to be situations in which investing is inappropriate - age, the proximity of a property purchase, lack of an emergency fund. These people end up paying extra tax or, if they invest inappropriately, (circumstances or lack of understanding) might lose their savings and then be entitled to UC.

Ruling out cutting the overall £20,000 limit was a silly thing to do, and cutting it anyway would be no big deal - it wasn’t a manifesto commitment to my knowledge. A £20,000 ISA allowance against a £12,570 personal allowance is madness and cutting it would be better than restricting personal choice - and raise more revenue in the process.