Reeves' ISA review

Grumpy_chap

Reference the upthread article extract from FT:

About 5,000 ISA millionaires.  
From a population of about 70 million.
Hardly a lot.

One of the largest platform providers indicates that the average age of their ISA millionaires is 72.

So, a small number of people have added to their TESSA / ISA at the maximum subscription every year since inception and accumulated accordingly.

That article is really not reporting anything that seems particularly exceptional.

jimjames

Altior said:

Alpine_Star said:

From today's FT Online.

At least the article contextualises the data, using inflation and QE. Explaining that their 'fortune' is predominately down to asset inflation and time in the market. Since they probably haven't realised much of the capital gain, the ISA element is largely irrelevant. Though obviously, if there is a 'tax free' option, it makes sense to use it.

With an ISA of £11 million I would suggest that this is not down to time in the market but very good asset choices even if they aren't trading frequently. 

Grumpy_chap

jimjames said:

With an ISA of £11 million

That's a bonus £10 million over and above the article about ISAs of £1 million.
Must be very very few people that achieved that.

eskbanker

Grumpy_chap said:

jimjames said:

With an ISA of £11 million

That's a bonus £10 million over and above the article about ISAs of £1 million.
Must be very very few people that achieved that.

The article says that it's the top 25 who average £11.3m, but obviously some of those 25 must be below that average!

Grumpy_chap

eskbanker said:

Grumpy_chap said:

jimjames said:

With an ISA of £11 million

That's a bonus £10 million over and above the article about ISAs of £1 million.
Must be very very few people that achieved that.

The article says that it's the top 25 who average £11.3m, but obviously some of those 25 must be below that average!

Thanks - I missed that part.
I just really saw the part about 5,000 ISA £1 millionaires.

slinger2

Ball-park wise, it looks like the ISA millionaires have about 10 billion all together. That's about 1% of the trillion pounds (or so) in ISAs. I'm a bit doubtful it's worth targeting such a relatively small group.

Grumpy_chap

Being an ISA millionaire is quite good and will need to have been invested in stocks (which the current policy mindset seems to be seeking to suggest is a good thing).

If I have got my maths and the historical limits correct, and individual starting out with the first TESSA and then putting in the maximum each year will have made contributions of £358,560.  Some may have that twice if inherited between spouse.

fiddlesticks0

A question re the impact of any upcoming cash ISA changes in the budget given I unfortunately have a cash ISA due to mature on Nov 30th, so a few days after the announcement. From what seems to be the most likely outcome from what I've read, that the allowance will be cut, to start from next tax year:

- I'm guessing the current interest rates on ISAS wouldn't likely change much in the few days after any announcement, ie it may take a few days to see any changes. I don't know whether a cut in the allowance from next year is more likely to mean lower or higher rates, or whether the most likely is no change.

- I would assume there will be a large number of new iSAs being opened if the allowance is cut with people who haven't used their allowance for this year, doing so. As ISA transfers can be slow and in my experience required to be chased to make sure they actually happen at the best of times, I'm a bit worried that trying to get a transfer done whilst there's a huge increase in ISA activity for the companies involved, could well be a headache.

I would usually open a new ISA and start the transfer of the maturing one a week or two in advance but for this one it looks that doing that may be a bit more tricky than usual (I've asked re this issue in another thread) so I don't know whether I'll be able to do that this time and may need to wait until 1st Dec to do the opening and transfer request.

Thanks. 

MeteredOut

fiddlesticks0 said:

A question re the impact of any upcoming cash ISA changes in the budget given I unfortunately have a cash ISA due to mature on Nov 30th, so a few days after the announcement. From what seems to be the most likely outcome from what I've read, that the allowance will be cut, to start from next tax year:

- I'm guessing the current interest rates on ISAS wouldn't likely change much in the few days after any announcement, ie it may take a few days to see any changes. I don't know whether a cut in the allowance from next year is more likely to mean lower or higher rates, or whether the most likely is no change.

- I would assume there may be a large number of new iSAs being opened if the allowance is cut with people who haven't used their allowance for this year, doing so. As ISA transfers can be slow and in my experience required to be chased to make sure they actually happen at the best of times, I'm a bit worried that trying to get a transfer done whilst there's a huge increase in ISA activity for the companies involved, could well be a headache.

I would usually open a new ISA and start the transfer of the maturing ISA a week or two in advnace but for this one it looks that doing that may be a bit more tricky than usual (I've asked re this issue in another thread) so I don't know whether I'll be able to do that this time and may need to wait until 1st Dec to do the opening and transfer request.

Thanks. 

Its not clear what your question is, but no-one can answer something based on media speculation.

fiddlesticks0

MeteredOut said:

fiddlesticks0 said:

A question re the impact of any upcoming cash ISA changes in the budget given I unfortunately have a cash ISA due to mature on Nov 30th, so a few days after the announcement. From what seems to be the most likely outcome from what I've read, that the allowance will be cut, to start from next tax year:

- I'm guessing the current interest rates on ISAS wouldn't likely change much in the few days after any announcement, ie it may take a few days to see any changes. I don't know whether a cut in the allowance from next year is more likely to mean lower or higher rates, or whether the most likely is no change.

- I would assume there may be a large number of new iSAs being opened if the allowance is cut with people who haven't used their allowance for this year, doing so. As ISA transfers can be slow and in my experience required to be chased to make sure they actually happen at the best of times, I'm a bit worried that trying to get a transfer done whilst there's a huge increase in ISA activity for the companies involved, could well be a headache.

I would usually open a new ISA and start the transfer of the maturing ISA a week or two in advnace but for this one it looks that doing that may be a bit more tricky than usual (I've asked re this issue in another thread) so I don't know whether I'll be able to do that this time and may need to wait until 1st Dec to do the opening and transfer request.

Thanks. 

Its not clear what your question is, but no-one can answer something based on media speculation.

I'm asking what people expect will happen *if* a reduction of the cash isa allowance from next year is announced:
 - would people expect the current cash ISA interest rates to change in the days after the announcement, and
-  is it likely to be a nightmare to try and get a cash ISA opened along with with a transfer-in of a maturing ISA, as I'm guessing there may be a deluge of ISA activity if such a change is announced.