Reeves' ISA review

wmb194

x44 said:

All this tripe about S&S ISA's and how its "investing" in industry really is a load of twaddle.

When you buy a share either directly or via a pooled fund such as a unit trust/OEIC the money you pay does not go anywhere near the company whose share you buy.

It goes to the person who is selling the shares to you!

All you are doing is in effect buying a right to have a dividend income stream given to you by the company.

The company just regards this endless buying and selling of its shares as a total pain and employs a share registrar to administer it for them.

There is no way this could possibly be described as investing in industry.

The only way a company might actually see any money from its "investors" is if it puts out a rights issue of new shares.  Not surprisingly these are not very popular with shareholders as it means shareholders actually have to give the company money (shock horror).

It wouldn’t be pointless: the aim is to boost liquidity in London’s secondary markets. Strong primary markets e.g., IPOs, rights issues require a strong secondary market. People want to think that if they need to buy or sell they can and at tight spreads. If you don’t have this then they look elsewhere, and at the moment that means New York.

Area88

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

ColdIron

Area88 said:

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

It hasn't been pulled. It has merely been paused/put on hold/delayed etc, choose your verb. It remains in the  'industry consultation' phase

Talks to banks, building societies and investment firms about options for reform are expected to continue

She was expected to announce outlines of the changes on July 15th at her Mansion House speech but now won't as there are no immediate changes

Albermarle

Area88 said:

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

I do not think a minor issue about cash ISA limits is likely to cause a financial crisis.
The discussion of this issue for the last few months has been way out of proportion to its importance.

Shylock_249

Maybe Reeves will surprise us all by raising the allowance of 20k in line with inflation dating back to when it was implemented in in fy 17/18 (unless my memory has failed me) to let's say 30k a year........

🤣 It's the way I tell 'em.

Kim_13

ColdIron said:

Area88 said:

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

It hasn't been pulled. It has merely been paused/put on hold/delayed etc, choose your verb. It remains in the  'industry consultation' phase

Talks to banks, building societies and investment firms about options for reform are expected to continue

I do think it’s possible that it’s been kicked into the long grass and will become something they won’t want to reform for fear of upsetting more of the electorate. It’s very easy to see the media calling it a second attack on pensioners, for very little gain. Overall limit cut to £10,000 with customers free to choose what to do with it would probably sit better with everyone - as industry know that those that can’t commit to 5-10 years+ and/or who are risk averse will opt for Cash.

Of the proportion using fully the £20,000, most won’t be doing so only in cash and if they have been in the last few years, it was only because rates were giving savers a fair return for the first time in 15 years.

It does beg the question of what’s been going on for the last 8 months; I thought it wasn’t announced at the budget because they were consulting then.

ColdIron

Kim_13 said:

ColdIron said:

Area88 said:

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

It hasn't been pulled. It has merely been paused/put on hold/delayed etc, choose your verb. It remains in the  'industry consultation' phase

Talks to banks, building societies and investment firms about options for reform are expected to continue

I do think it’s possible that it’s been kicked into the long grass

'Everything's still on the table' as they say  

Albermarle

Kim_13 said:

ColdIron said:

Area88 said:

I’m glad this has been pulled. If the banking industry is telling you it’s a bad idea and will affect mortgage costs and other debts then it would be unwise to proceed unless Reeves wants to create another financial crisis. 

It hasn't been pulled. It has merely been paused/put on hold/delayed etc, choose your verb. It remains in the  'industry consultation' phase

Talks to banks, building societies and investment firms about options for reform are expected to continue

I do think it’s possible that it’s been kicked into the long grass and will become something they won’t want to reform for fear of upsetting more of the electorate. It’s very easy to see the media calling it a second attack on pensioners, for very little gain. Overall limit cut to £10,000 with customers free to choose what to do with it would probably sit better with everyone - as industry know that those that can’t commit to 5-10 years+ and/or who are risk averse will opt for Cash.

Of the proportion using fully the £20,000, most won’t be doing so only in cash and if they have been in the last few years, it was only because rates were giving savers a fair return for the first time in 15 years.

It does beg the question of what’s been going on for the last 8 months; I thought it wasn’t announced at the budget because they were consulting then.

I assume they have been consulting/listening to interested parties/seeing how it might work in practice ( or not etc )
Plus it has been clearly floated as an idea to see what public opinion might be.

Shylock_249

Maybe someone has told Reeves that investments can go up and down and people might NOT get back what they put in them!😂😂

It wouldn't be much of a vote winner if investors placed their 16k (20k - 4k) cash each year into stocks and shares as suggested and had it valued just before the next general election to find that it was worth a lot less than they invested.  It would be hard to tell such investors that it is a long term investment and certainly every other political party would use it as a stick to whip her.

wmb194

Shylock_249 said:

Maybe someone has told Reeves that investments can go up and down and people might NOT get back what they put in them!😂😂

It wouldn't be much of a vote winner if investors placed their 16k (20k - 4k) cash each year into stocks and shares as suggested and had it valued just before the next general election to find that it was worth a lot less than they invested.  It would be hard to tell such investors that it is a long term investment and certainly every other political party would use it as a stick to whip her.

It wouldn’t be difficult, they would say that in the long run investments tend to outperform cash but there can be periods of underperformance.

Plus there are warnings plastered everywhere on investment platforms and fund literature that you might get back less than you invest.