Reeves' ISA review

VNX

masonic said:

Albermarle said:

VNX said:

george4064 said:

Will be interesting to see what comes of this. Potentially restricting the amount of cash one can hold in an ISA or reducing the cash ISA allowance to just £4k.

I think its important to try demystify some of the (often incorrect) concerns about investing, so that these potential change(s) actually encourage more people to invest rather than just save outside an ISA.

http://archive.today/hlft2 

Oh I didn’t know Rachael Reeves was looking to make any changes to ISAs

There has been speculation about it for many months, and there does seem to be some kind of internal review, but quite possibly it will not come to anything. Or it might, nobody knows.

I think I might just detect a faint hint of irony in VNX's words

Just a faint hint, maybe I should have added a 😉 

[Deleted User]

TheTelltaleChart said:

VNX said:

Oh I didn’t know Rachael Reeves was looking to make any changes to ISAs

You've misunderstood. This thread is about Vic Reeves' opinions on ISAs.

You wouldn't let it lie would you.......

Albermarle

VNX said:

masonic said:

Albermarle said:

VNX said:

george4064 said:

Will be interesting to see what comes of this. Potentially restricting the amount of cash one can hold in an ISA or reducing the cash ISA allowance to just £4k.

I think its important to try demystify some of the (often incorrect) concerns about investing, so that these potential change(s) actually encourage more people to invest rather than just save outside an ISA.

http://archive.today/hlft2 

Oh I didn’t know Rachael Reeves was looking to make any changes to ISAs

There has been speculation about it for many months, and there does seem to be some kind of internal review, but quite possibly it will not come to anything. Or it might, nobody knows.

I think I might just detect a faint hint of irony in VNX's words

Just a faint hint, maybe I should have added a 😉 

Must have had a sense of humour bypass yesterday evening 

The subject is actually the main headline in the DT today, which seems a bit OTT considering everything else going on in the world. 

SnowMan

It's been suggested that there should be a warning when you save in a cash ISA (like there is with investments) and I think that has some merit. Perhaps someone can improve on my attempt

Cash ISAs may (and often do) earn interest at less than the rate at which prices increases, and so you may get back considerably less than what you saved if you take into account what that money can buy.

Albermarle

SnowMan said:

It's been suggested that there should be a warning when you save in a cash ISA (like there is with investments) and I think that has some merit. Perhaps someone can improve on my attempt

Cash ISAs may (and often do) earn interest at less than the rate at which prices increases, and so you may get back considerably less than what you saved if you take into account what that money can buy.

I think many will just see the words' get back considerably less' and misunderstand them ( wilfully in some cases)

I will have a go.

Cash ISAs and other savings account may (and often do) earn interest at less than the rate at which prices increase. This means that over time the value of your savings in terms of what they will buy, may slowly decrease. 

masonic

Albermarle said:

SnowMan said:

It's been suggested that there should be a warning when you save in a cash ISA (like there is with investments) and I think that has some merit. Perhaps someone can improve on my attempt

Cash ISAs may (and often do) earn interest at less than the rate at which prices increases, and so you may get back considerably less than what you saved if you take into account what that money can buy.

I think many will just see the words' get back considerably less' and misunderstand them ( wilfully in some cases)

I will have a go.

Cash ISAs and other savings account may (and often do) earn interest at less than the rate at which prices increase. This means that over time the value of your savings in terms of what they will buy, may slowly decrease. 

Why not simply "even after the addition of tax free interest, the spending power of money saved in a cash ISA may decrease over time due to prices increasing".

Hoenir

vacheron said:

I can almost hear the thousands of scammers rubbing their hands together in glee at the thought of tens, if not hundreds of thousands of inexperienced investors who may now feel compelled to invest for the first time beacuse their govenment have deliberately nudged them in that direction, implying that it must be in their best interests to do so, despite having no idea how, or where, to invest.   

There's no shortage of guidance and suitable default pension plans from reputable sources and companies. 

SnowMan

masonic said:

Albermarle said:

SnowMan said:

It's been suggested that there should be a warning when you save in a cash ISA (like there is with investments) and I think that has some merit. Perhaps someone can improve on my attempt

Cash ISAs may (and often do) earn interest at less than the rate at which prices increases, and so you may get back considerably less than what you saved if you take into account what that money can buy.

I think many will just see the words' get back considerably less' and misunderstand them ( wilfully in some cases)

I will have a go.

Cash ISAs and other savings account may (and often do) earn interest at less than the rate at which prices increase. This means that over time the value of your savings in terms of what they will buy, may slowly decrease. 

Why not simply "even after the addition of tax free interest, the spending power of money saved in a cash ISA may decrease over time due to prices increasing".

Like that version

Hoenir

Albermarle said:

SnowMan said:

It's been suggested that there should be a warning when you save in a cash ISA (like there is with investments) and I think that has some merit. Perhaps someone can improve on my attempt

Cash ISAs may (and often do) earn interest at less than the rate at which prices increases, and so you may get back considerably less than what you saved if you take into account what that money can buy.

I think many will just see the words' get back considerably less' and misunderstand them ( wilfully in some cases)

I will have a go.

Cash ISAs and other savings account may (and often do) earn interest at less than the rate at which prices increase. This means that over time the value of your savings in terms of what they will buy, may slowly decrease. 

Cash is earning above the rate of inflation currently. 

george4064

Here's my attempt:

"The value of your investments may go up or down over time, whereas the value of your cash ISA can only go up (in the absence of any withdrawals). Over the long-term investments tend to go up more than a cash ISA, however this is not guaranteed.

The spending power of your investments and cash ISA are both subject to being eroded by inflation, and unless the performance of an investment or cash ISA meets or exceeds the rate of inflation, the real value of that investment or cash balance will reduce (ie its spending power will fall).

Numerical evidence suggests that, over the long-term, diversified investments are more likely to meet or exceed the rate of inflation than cash savings (such as a cash ISA). Therefore if you have a long time horizon, investing your cash may be more appropriate than a cash ISA, giving your savings the best opportunity to keep up with inflation and provide a sufficient level of return to meet your objectives."