Reeves' ISA review

Growingold

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.

Okay some people are really struggling and I really do sympathise with them.  However a lot of people squander their money they could save for a rainy day on frivolous things.  The average household has numerous subscriptions for various things, are these really essential?  A lot of people must have the latest trend.  
And before anyone jumps on me for saying these things I cannot afford to save £20,000 a year in ISA's but I don't resent people who can.  I don't waste my money on unnecessary subscriptions or the latest fad in clothes or electronics.  I save what I can and when I want to treat myself I can.  I know from personal experience what it is like to watch every penny coming in.  Luckily I'm not in that situation now 
If people want to build up massive ISA pots then let them, they've earnt their money and they're free to choose what they spend it on, whether the here and now or the future.
Raising the personal allowance ( I wish they would) would not just benefit the lower earners though everyone would benefit.

Sea_Shell

Have ISA balances/allowances always been "inheritable" between spouses?

If not, is that something else that might get reversed??

clairec666

Growingold said:

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.

Okay some people are really struggling and I really do sympathise with them.  However a lot of people squander their money they could save for a rainy day on frivolous things.  The average household has numerous subscriptions for various things, are these really essential?  A lot of people must have the latest trend.  
And before anyone jumps on me for saying these things I cannot afford to save £20,000 a year in ISA's but I don't resent people who can.  I don't waste my money on unnecessary subscriptions or the latest fad in clothes or electronics.  I save what I can and when I want to treat myself I can.  I know from personal experience what it is like to watch every penny coming in.  Luckily I'm not in that situation now 
If people want to build up massive ISA pots then let them, they've earnt their money and they're free to choose what they spend it on, whether the here and now or the future.
Raising the personal allowance ( I wish they would) would not just benefit the lower earners though everyone would benefit.

I don't disagree with your point here. I do slightly resent people who squander money when they could be saving - I'm struggling to find work at the moment, but am not entitled to universal credit because I have managed to save, despite always being on a low wage.

My point about ISAs is that £20000 per year is rather generous. Yes, let people be able to benefit from their savings, but I think £10000 or even £5000 should suffice.

Alexland

Sea_Shell said:

Have ISA balances/allowances always been "inheritable" between spouses?

If not, is that something else that might get reversed??

I've now heard just about every doom story possible about this budget. It feels like everyone is now expecting their interests to be attacked in some way and is going into economic hibernation preparing for the worst. The government didn't learn their lesson from last time when they were talking down the economy to allow such uncertainty to drag on for so long.

Whoever is in power needs to bring down public spending to pre-covid levels per capita and use that money wisely as people don't want to be hammered endlessly and the taxpayer seems to be at breaking point on the extent of tax & waste they will tolerate as it's having a material impact on their living standards and attainment of life goals and there seems to be no hope it's not going to keep getting worse.

Sea_Shell

Found it, Google tells me...

"The Additional Permitted Subscription (APS) allowance was announced in the 2014 Autumn Statement and came into effect from April 2015. It’s available if your spouse or civil partner dies and it lets you make contributions to an ISA on top of your normal annual ISA allowance. These are called “Additional Permitted Subscriptions”.


So it's a fairly recent thing.      What can be given, can also be taken away.    Hopefully it's not on their radar.   

But it could be.  

Altior

Aylesbury_Duck said:

Shylock_249 said:

One thing is pretty obvious is that if Reeves leaves it as it is it won't be a vote looser but if she tinkers with it it almost certainly will be.  Maybe she thinks that anyone who can save 20k a year is NOT gonna vote for the current government anyway.

I doubt that.  The old Labour/Conservative divide is much much harder to define nowadays.  I suspect there are plenty of reasonably wealthy folk who vote Labour, and plenty of those having to live more modestly who vote Conservative.  That perhaps wasn't the case until relatively recently.

I'll avoid trying to classify who votes Reform, because it would get me banned.

Why would stating that they are exasperated former Labour and Tory voters get you banned? 

Maybe you're inferring something else, but since support for both of the Labour and Tory parties has tanked, and Reform's has shot up, most of it must have come from the two former dominant parties. Unlikely to be from the Liberals, who have actually enjoyed a small uptick since the election (as far as polling goes, anyway). 

Altior

The stated intention of creating growth in UK business is incongruent with lumping costs, additional tax and increased legislation on them. Even if you could create an ISA scenario that led to small investors purchasing more equity/shares in business reporting in the UK, it does not remove any of the variables holding UK business back. 

They need to create an environment where UK business thrives, then it will attract investment, naturally. Forcing it through the tax system for end users and small investors seems nonsensical. 

Shylock_249

Altior said:

They need to create an environment where UK business thrives, then it will attract investment, naturally. 

How does the government do that?  Oh, let me think raise the employers Ni rate from 13.8 to 15%.....

Albermarle

clairec666 said:

Growingold said:

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.

Okay some people are really struggling and I really do sympathise with them.  However a lot of people squander their money they could save for a rainy day on frivolous things.  The average household has numerous subscriptions for various things, are these really essential?  A lot of people must have the latest trend.  
And before anyone jumps on me for saying these things I cannot afford to save £20,000 a year in ISA's but I don't resent people who can.  I don't waste my money on unnecessary subscriptions or the latest fad in clothes or electronics.  I save what I can and when I want to treat myself I can.  I know from personal experience what it is like to watch every penny coming in.  Luckily I'm not in that situation now 
If people want to build up massive ISA pots then let them, they've earnt their money and they're free to choose what they spend it on, whether the here and now or the future.
Raising the personal allowance ( I wish they would) would not just benefit the lower earners though everyone would benefit.

I don't disagree with your point here. I do slightly resent people who squander money when they could be saving - I'm struggling to find work at the moment, but am not entitled to universal credit because I have managed to save, despite always being on a low wage.

My point about ISAs is that £20000 per year is rather generous. Yes, let people be able to benefit from their savings, but I think £10000 or even £5000 should suffice.

It is also interesting to see this in an international context.
The various ways you can earn savings interest tax free n the UK ( Cash ISA, Personal savings allowance, starter rate for savings) is very generous by International standards.
An Irish or German person would see being able to shelter even £5K pa from tax on interest as a godsend, never mind £20K +

Shylock_249

clairec666 said:

My point about ISAs is that £20000 per year is rather generous. Yes, let people be able to benefit from their savings, but I think £10000 or even £5000 should suffice.

I think there are plenty of people out there who think that interest on savings shouldn't be taxed in the first place; when one considers the money saved has, in most cases, been taxed previously as income tax.