Reeves' ISA review

Shylock_249

Swipe said:

Shylock_249 said:

ColdIron said:

clairec666 said:

Kim_13 said:

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.

It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

But it's not as if they are raising the personal allowance is it? The ISA move would disadvantage the 'wealthy' and maintaining the freeze disadvantages everybody. It's hard to spot who the winners are with this move except the Treasury

I’d love to know what defines a “wealthy” person.

I’ve often found, where envy and greed are concerned, one person would define some one as being wealthy if they have a fiver more than themselves.

According to HM Revenue & Customs (HMRC) and corroborated by the National Audit Office (NAO), a wealthy individual is defined as someone who:

Earns more than £200,000 per year, or

Possesses assets worth more than £2 million,

In any of the past three tax years.

Swipe said:

Shylock_249 said:

ColdIron said:

clairec666 said:

Kim_13 said:

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.

It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

But it's not as if they are raising the personal allowance is it? The ISA move would disadvantage the 'wealthy' and maintaining the freeze disadvantages everybody. It's hard to spot who the winners are with this move except the Treasury

I’d love to know what defines a “wealthy” person.

I’ve often found, where envy and greed are concerned, one person would define some one as being wealthy if they have a fiver more than themselves.

According to HM Revenue & Customs (HMRC) and corroborated by the National Audit Office (NAO), a wealthy individual is defined as someone who:

Earns more than £200,000 per year, or

Possesses assets worth more than £2 million,

In any of the past three tax years.

Well, I now know my place in life! 🤣

Thanks

Rich2808

I assume any change could only happen from 6 April 2026 - doing it during the tax year would cause administrative chaos surely?

Alexland

Rich2808 said:

I assume any change could only happen from 6 April 2026 - doing it during the tax year would cause administrative chaos surely?

If the people running with the idea are stupid enough to think it has merit then anything is possible.

Reducing the Cash ISA contribution limit is a complete waste of energy as people can simply get an attractive interest rate on S&S ISA cash balances (Dodl etc) or use a money market fund for similar return especially if you can still later transfer between ISA types if you really want a big Cash ISA.

It's as poorly conceived and unnecessary as the British ISA or LTAF ideas.

With the shameful state of this country's economy it's a total distraction to what needs fixing.

Albermarle

Swipe said:

Shylock_249 said:

ColdIron said:

clairec666 said:

Kim_13 said:

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.

It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

But it's not as if they are raising the personal allowance is it? The ISA move would disadvantage the 'wealthy' and maintaining the freeze disadvantages everybody. It's hard to spot who the winners are with this move except the Treasury

I’d love to know what defines a “wealthy” person.

I’ve often found, where envy and greed are concerned, one person would define some one as being wealthy if they have a fiver more than themselves.

According to HM Revenue & Customs (HMRC) and corroborated by the National Audit Office (NAO), a wealthy individual is defined as someone who:

Earns more than £200,000 per year, or

Possesses assets worth more than £2 million,

In any of the past three tax years.

It is not clear to me from what I can read, if the £2M in assets refers to a household or an individual. Or does it mean a married couple would need £4M for one or both to be classed as wealthy individuals?

Also they refer to the reason for dealing with wealthy individuals differently is because of their often complex tax affairs, which would indicate they are largely targeting people with a lot more than £2 million.
Someone with a normal house in London and a good pension pot, is going to be in that £2M area, but unlikely to be involved in any complex tax planning.

Ocelot

clairec666 said:

Kim_13 said:

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.

If you're putting £20000 into an ISA each year then you're hardly struggling for money, yet by keeping the personal allowance frozen those at the lower end of the pay scale are losing a higher proportion of their income to tax. If Labour stuck to their original ethos, they would be slashing that ISA limit and raising the personal allowance in order to help out lower paid workers. There would be grumbles, but they'd soon go away. It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

I don 't know about you, but my 20k per year isn't 'new' money, it's money recycled from  taxable accounts.

clairec666

Ocelot said:

clairec666 said:

Kim_13 said:

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.

If you're putting £20000 into an ISA each year then you're hardly struggling for money, yet by keeping the personal allowance frozen those at the lower end of the pay scale are losing a higher proportion of their income to tax. If Labour stuck to their original ethos, they would be slashing that ISA limit and raising the personal allowance in order to help out lower paid workers. There would be grumbles, but they'd soon go away. It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

I don 't know about you, but my 20k per year isn't 'new' money, it's money recycled from  taxable accounts.

It's still more money than a lot of people have though. I'm not knocking anyone who is working hard and managing to save some of their earnings, but I don't see why people should be able to build up massive ISA pots while those struggling to get by with little savings are paying more and more tax on their earnings. Still, political debate is to be avoided on this forum, so I'll say no more.

wmb194

Alexland said:

Rich2808 said:

I assume any change could only happen from 6 April 2026 - doing it during the tax year would cause administrative chaos surely?

If the people running with the idea are stupid enough to think it has merit then anything is possible.

Reducing the Cash ISA contribution limit is a complete waste of energy as people can simply get an attractive interest rate on S&S ISA cash balances (Dodl etc) or use a money market fund for similar return especially if you can still later transfer between ISA types if you really want a big Cash ISA.

It's as poorly conceived and unnecessary as the British ISA or LTAF ideas.

With the shameful state of this country's economy it's a total distraction to what needs fixing.

Previous iterations of this rule restricted the cash-like securities you were allowed to hold in the S&S version and you weren't supposed to hold large cash balances for extended periods e.g., with the original PEPs you weren't able to hold gilts in them.

Ocelot

clairec666 said:

Ocelot said:

clairec666 said:

Kim_13 said:

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.

If you're putting £20000 into an ISA each year then you're hardly struggling for money, yet by keeping the personal allowance frozen those at the lower end of the pay scale are losing a higher proportion of their income to tax. If Labour stuck to their original ethos, they would be slashing that ISA limit and raising the personal allowance in order to help out lower paid workers. There would be grumbles, but they'd soon go away. It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

I don 't know about you, but my 20k per year isn't 'new' money, it's money recycled from  taxable accounts.

It's still more money than a lot of people have though. I'm not knocking anyone who is working hard and managing to save some of their earnings, but I don't see why people should be able to build up massive ISA pots while those struggling to get by with little savings are paying more and more tax on their earnings. Still, political debate is to be avoided on this forum, so I'll say no more.

I appreciate that, but mine has been saved over 40 years and is a substitute for a pension, as I was not offered a pension at most of my jobs, and didn't know enough about private pensions to open one, before the internet.

jimjames

Ocelot said:

clairec666 said:

Kim_13 said:

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.

If you're putting £20000 into an ISA each year then you're hardly struggling for money, yet by keeping the personal allowance frozen those at the lower end of the pay scale are losing a higher proportion of their income to tax. If Labour stuck to their original ethos, they would be slashing that ISA limit and raising the personal allowance in order to help out lower paid workers. There would be grumbles, but they'd soon go away. It's not as if they're raiding our existing ISAs and taxing us on their contents, they would just be limiting how much we put in. £5000 seems reasonable in my opinion.

I don 't know about you, but my 20k per year isn't 'new' money, it's money recycled from  taxable accounts.

And that shows the benefit to the Treasury. If it remains in taxable accounts it may increase their receipts

subjecttocontract

If the amount that can go into a cash isa is reduced, I won't be paying more into a S&S isa that's for sure. I'll probably just put it in a fixed rate bond and pay tax on it.......which is most probably where the money already is. I'm in my seventies and dont want any more invested in S&S. I suspect there are many hundreds of thousands with the same idea.

I'm genuinely not bothered. I think I have an expectation that the £20K cash limit will be reduced so if it does it won't come as a surprise or a shock and I'll just work around them as best I can within the rules.