Reeves' ISA review

Kim_13

I would wager it is higher in the past few years. In 2021/22 cash returns, particularly ISA ones were on the floor, so people would have withdrawn. It took a lot more to hit the PSA then, so ISAs weren't needed for most people (though they remained the best way to invest.) Full subscriptions over the past couple of years might well be people returning funds withdrawn at this time.

subjecttocontract

Kim_13 said:

I would wager it is higher in the past few years. In 2021/22 cash returns, particularly ISA ones were on the floor, so people would have withdrawn. It took a lot more to hit the PSA then, so ISAs weren't needed for most people (though they remained the best way to invest.) Full subscriptions over the past couple of years might well be people returning funds withdrawn at this time.

I agree. The chart is also in the middle of the Covid pandemic which may affect the data. I think the results are likely to be significantly different in the current tax year.

wmb194

clairec666 said:

wmb194 said:

clairec666 said:

SnowMan said:

poseidon1 said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Interesting article below from A J Bell which backs up your statement. Particularly interesting how the total value in stocks and shares isas completely dwarfs that of cash isas by a magnitude of 7 times.

https://www.ajbell.co.uk/group/news/isas-unpacked-who-holds-them-and-how-much-do-they-have#:~:text=Around 1.8 million use up their full,60% contributing less than £5,000 a year

Obviously a large chunk of the population cannot afford to get anywhere  near the maximum £20k annual contribution, so our little echo chamber of forumites in no way reflects the wider saving public.

I fear for that reason, other than the inevitable backlash from the Tory press, reducing cash isas to £10k annually will still be a generous limit for the vast majority. 

Personally as long as the £20k overall  annual limit is retained, I won't be bothered either way.

The data is all at the link below although it's only available up to the 2021/2022 tax year

https://www.gov.uk/government/statistics/annual-savings-statistics-2024#full-publication-update-history

Of the 22 million UK residents who had an ISA (cash or stocks and shares) at all (so many don't even have one and so aren't represented in the chart below at all) the percentages contributing over 10K pa is only 14% (of which 8% contribute the full 20K)

That's an interesting pie chart. Presumably it would be harder to collate that data for more recent years when we were able to pay into more than one ISA per tax year.

Shouldn't be. To open an Isa you have to supply an NI number so it should be easy to analyse these data using this as a unique identifier.

Well, not impossible, but for earlier years you could just analyse data from individual accounts, without grouping them by NI number

You can have a look at the spreadsheet Isa providers have to send HMRC every year here:

https://www.gov.uk/government/publications/annual-return-spreadsheet-template-for-isa-managers

pecunianonolet

The_Green_Hornet said:

2010 said:

The Mail for example has had ISA limit cuts as down to £4/£10/£12 thousand, so far.

I know the Mail is a source of fun but then the Financial Times has also run similar stories.

For example, a recent article contained the following:

"In recent weeks the Treasury has privately floated a level of £12,000 a year, down from the current £20,000 but higher than Reeves’ initial £10,000 proposal, according to people familiar with the plans."

Rachel Reeves considers less dramatic cut to cash Isa allowance (Firewalled).

So the FT are inferring that the source of these rumours is the Government itself.

Clear link of above FT article: https://removepaywalls.com/https://www.ft.com/content/289775ee-d2ec-434f-8989-f37232dac60c

SnowMan

clairec666 said:

SnowMan said:

poseidon1 said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Interesting article below from A J Bell which backs up your statement. Particularly interesting how the total value in stocks and shares isas completely dwarfs that of cash isas by a magnitude of 7 times.

https://www.ajbell.co.uk/group/news/isas-unpacked-who-holds-them-and-how-much-do-they-have#:~:text=Around 1.8 million use up their full,60% contributing less than £5,000 a year

Obviously a large chunk of the population cannot afford to get anywhere  near the maximum £20k annual contribution, so our little echo chamber of forumites in no way reflects the wider saving public.

I fear for that reason, other than the inevitable backlash from the Tory press, reducing cash isas to £10k annually will still be a generous limit for the vast majority. 

Personally as long as the £20k overall  annual limit is retained, I won't be bothered either way.

The data is all at the link below although it's only available up to the 2021/2022 tax year

https://www.gov.uk/government/statistics/annual-savings-statistics-2024#full-publication-update-history

Of the 22 million UK residents who had an ISA (cash or stocks and shares) at all (so many don't even have one and so aren't represented in the chart below at all) the percentages contributing over 10K pa is only 14% (of which 8% contribute the full 20K)

That's an interesting pie chart. Presumably it would be harder to collate that data for more recent years when we were able to pay into more than one ISA per tax year.

I find it difficult to identify how they may have come up with those overall figures from table 9.7 of the Individual Savings Account (ISA) tables: September 2024. There will be people who have transferred current year ISAs within the tax year and then subscribed to the new ISA and those who've subscribed to both stocks and shares and cash ISAs with different providers in 2021/2022. Potentially it is more difficult to collate for later years where subscriptions are made to more than one cash ISA. But then again in theory as wmb194 says, if they had a complete list of subscriptions by NI number they could produce figures directly but I sense that they don't have that data. To add to the confusion they say
The total number of ISA holders is not reported by ISA managers. Estimates of the total numbers of ISA holders are based on average market values of ISAs for a sample of individuals combined with reported aggregate ISA market values.
Is that talking about those with ISAs who haven't subscribed at all or do they not even have numbers for those who have subscribed, I don't know.
For the puposes of getting a rough feel for the distribution of whether and how much ISA subscriptions are I think we have to assume that their figures are near enough right.

subjecttocontract

SnowMan said:

clairec666 said:

SnowMan said:

poseidon1 said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Interesting article below from A J Bell which backs up your statement. Particularly interesting how the total value in stocks and shares isas completely dwarfs that of cash isas by a magnitude of 7 times.

https://www.ajbell.co.uk/group/news/isas-unpacked-who-holds-them-and-how-much-do-they-have#:~:text=Around 1.8 million use up their full,60% contributing less than £5,000 a year

Obviously a large chunk of the population cannot afford to get anywhere  near the maximum £20k annual contribution, so our little echo chamber of forumites in no way reflects the wider saving public.

I fear for that reason, other than the inevitable backlash from the Tory press, reducing cash isas to £10k annually will still be a generous limit for the vast majority. 

Personally as long as the £20k overall  annual limit is retained, I won't be bothered either way.

The data is all at the link below although it's only available up to the 2021/2022 tax year

https://www.gov.uk/government/statistics/annual-savings-statistics-2024#full-publication-update-history

Of the 22 million UK residents who had an ISA (cash or stocks and shares) at all (so many don't even have one and so aren't represented in the chart below at all) the percentages contributing over 10K pa is only 14% (of which 8% contribute the full 20K)

That's an interesting pie chart. Presumably it would be harder to collate that data for more recent years when we were able to pay into more than one ISA per tax year.

For the puposes of getting a rough feel for the distribution of whether and how much ISA subscriptions are I think we have to assume that their figures are near enough right.

But presumably only for the 21/22 tax year and not necessarily representative of current data.

SnowMan

subjecttocontract said:

SnowMan said:

clairec666 said:

SnowMan said:

poseidon1 said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Interesting article below from A J Bell which backs up your statement. Particularly interesting how the total value in stocks and shares isas completely dwarfs that of cash isas by a magnitude of 7 times.

https://www.ajbell.co.uk/group/news/isas-unpacked-who-holds-them-and-how-much-do-they-have#:~:text=Around 1.8 million use up their full,60% contributing less than £5,000 a year

Obviously a large chunk of the population cannot afford to get anywhere  near the maximum £20k annual contribution, so our little echo chamber of forumites in no way reflects the wider saving public.

I fear for that reason, other than the inevitable backlash from the Tory press, reducing cash isas to £10k annually will still be a generous limit for the vast majority. 

Personally as long as the £20k overall  annual limit is retained, I won't be bothered either way.

The data is all at the link below although it's only available up to the 2021/2022 tax year

https://www.gov.uk/government/statistics/annual-savings-statistics-2024#full-publication-update-history

Of the 22 million UK residents who had an ISA (cash or stocks and shares) at all (so many don't even have one and so aren't represented in the chart below at all) the percentages contributing over 10K pa is only 14% (of which 8% contribute the full 20K)

That's an interesting pie chart. Presumably it would be harder to collate that data for more recent years when we were able to pay into more than one ISA per tax year.

For the puposes of getting a rough feel for the distribution of whether and how much ISA subscriptions are I think we have to assume that their figures are near enough right.

But presumably only for the 21/22 tax year and not necessarily representative of current data.

We can only work with the data we have

Total ISA subscriptions in 2023/2024 are shown in the report below (see page 9). Certainly there has been an increase in amounts subscribed since 2021/2022. And there have been some significant changes in the distribution between cash and stocks and shares also (the amount of cash ISA subscriptions more than doubled between these years but the amount of stocks and shares subscriptions decreased).

https://committees.parliament.uk/publications/49909/documents/268186/default/

Shylock_249

SnowMan said:

poseidon1 said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Interesting article below from A J Bell which backs up your statement. Particularly interesting how the total value in stocks and shares isas completely dwarfs that of cash isas by a magnitude of 7 times.

https://www.ajbell.co.uk/group/news/isas-unpacked-who-holds-them-and-how-much-do-they-have#:~:text=Around 1.8 million use up their full,60% contributing less than £5,000 a year

Obviously a large chunk of the population cannot afford to get anywhere  near the maximum £20k annual contribution, so our little echo chamber of forumites in no way reflects the wider saving public.

I fear for that reason, other than the inevitable backlash from the Tory press, reducing cash isas to £10k annually will still be a generous limit for the vast majority. 

Personally as long as the £20k overall  annual limit is retained, I won't be bothered either way.

The data is all at the link below although it's only available up to the 2021/2022 tax year

https://www.gov.uk/government/statistics/annual-savings-statistics-2024#full-publication-update-history

Of the 22 million UK residents who had an ISA (cash or stocks and shares) at all (so many don't even have one and so aren't represented in the chart below at all) the percentages contributing over 10K pa is only 14% (of which 8% contribute the full 20K)

Interesting pie chart.

Unless I'm mistaken, It's interesting to note that those who took out a 20k ISA actually represented 17% of those who saved ..... 47% took out ISAs and 8% of those opted for 20k.  I'd suggest that is a sizeable number of people.  Also of those who did save the 20k savers were the second highest group.

The 53% of those with existing ISAs "might" well have saved many years before with minimal savings. 

masonic

subjecttocontract said:

masonic said:

So about 75% of ISA subscribers will not be impacted as they don't use more allowance than that ordinarily. Seems well worth the political heat.

Yes but I'm so not interested in wether the changes create political 'heat' or keep 75% of ISA subscribers happy. I'm interested in how changes are going to affect me personally.

Presumably you, or people like you, will be contributing to the political heat. If not then it will cost them very little.

But it will also gain them very little.

Personally I just see it as rather pointless, whether the aim is to increase investment in UK stocks or raise more tax. It isn't going to move the needle if over three quarters won't be impacted.

But if a side effect is I can no longer hold gilts in my S&S ISA then I'll be unimpressed.

Catplan

boingy said:

Careful what you wish for. If they change the name it will give them a perfect excuse to change the rules.
As for the newspaper rumours, you can be sure that they originate from an unofficial govt source. It's fairly standard practice to test the waters with rumours before making it a policy. It gives them a chance to u-turn without u-turning if there is a massive backlash.

This I’m of same belief they are testing the waters, see what the response is.