New ISA limit 2025 - Fixed rate ISA

badmemory

They will need to factor in how long it will take the banks to set up the new systems & I suspect that next April will not be long enough for them.  I expect that if this does happen the banks will be saying they cannot stop people from saving more than they should in cash.

poseidon1

https://inews.co.uk/inews-lifestyle/money/saving-and-banking/cash-isas-demand-increases-allowance-cut-3787506

If its true there has been a sudden surge in demand for cash ISAs ( from newcomers?), there is a degree of irony that this likely resulted from the continual media noise concerning the proposed reductions. 

If much of this surge is from newcomers, have to wonder whether despite all the positive messaging in the past about the benefits of ISAs, it has taken negative news to finally wake some people up. 

Ocelot

I can imagine the media's response if they did do this: 'Reeves robs grannies to pay her city mates' (which wouldn't be far from the truth). It may result in such an outcry that they'd have to U-turn again.

Albermarle

Ocelot said:

I can imagine the media's response if they did do this: 'Reeves robs grannies to pay her city mates' (which wouldn't be far from the truth). It may result in such an outcry that they'd have to U-turn again.

Although in reality it would only be pretty well off people , who would be affected by the £20K annual limit dropping.
Not sure many Grannies can afford to add £20K pa to an ISA. I think about 50% of the population has either zero or very limited savings.

Daz2009

Albermarle said:

Ocelot said:

I can imagine the media's response if they did do this: 'Reeves robs grannies to pay her city mates' (which wouldn't be far from the truth). It may result in such an outcry that they'd have to U-turn again.

Although in reality it would only be pretty well off people , who would be affected by the £20K annual limit dropping.
Not sure many Grannies can afford to add £20K pa to an ISA. I think about 50% of the population has either zero or very limited savings.

It's not necessarily new money that's being added,it could be from a different investment/savings plan.
For example you might have a 1 year NS&I investment,if the interest rate drops at the end of the year you might put £20k into an ISA if the rate is better, that's something I was certainly planning 

badmemory

The problem comes when you are near your 70s & your last parent dies.  This doubled my savings & took a couple of years to "stash".  This was not long after I watched my sister lose 50% of her S&S savings.  Not something to fill you with confidence.  The less you can put into untaxable savings the less time it will last when you need it.  Despite the triple lock I have gone from still saving in retirement to having to withdraw & that is without needing to pay for any extra help.  This is not a poor little me post by the way, more a reality check. 

boingy

Yeah, there are several life events that might mean "normal" folks suddenly have a large amount of cash to save and/or invest. The obvious one is an inheritance but it could also be a redundancy payment,  a divorce settlement, an insurance pay out, a house downsize, or a lump sum from a pension. There are a currently couple of threads running on here with folks who have 6 figure sums to put somewhere. So don't just assume it's for the rich. 

jimjames

badmemory said:

They will need to factor in how long it will take the banks to set up the new systems & I suspect that next April will not be long enough for them.  I expect that if this does happen the banks will be saying they cannot stop people from saving more than they should in cash.

I find that hard to believe. A simple change to the limit could be implemented very easily I suspect, no different really whether it is up or down.

clairec666

jimjames said:

badmemory said:

They will need to factor in how long it will take the banks to set up the new systems & I suspect that next April will not be long enough for them.  I expect that if this does happen the banks will be saying they cannot stop people from saving more than they should in cash.

I find that hard to believe. A simple change to the limit could be implemented very easily I suspect.

If it's just a simple reduction in the total ISA limit, then surely that's easy to implement. It gets more complicated if there's going to be a lower limit for cash and additional allowance for S&S, in which case customers need to be prevented from transferring between the two. Still, no major upheaval to current systems, I imagine.

masonic

jimjames said:

badmemory said:

They will need to factor in how long it will take the banks to set up the new systems & I suspect that next April will not be long enough for them.  I expect that if this does happen the banks will be saying they cannot stop people from saving more than they should in cash.

I find that hard to believe. A simple change to the limit could be implemented very easily I suspect, no different really whether it is up or down.

If you look at the 2024/25 set of changes, the legislation was finalised on 11th March and put before the HoC on 12th, giving less than a month before it came into force for the actual details to be implemented Providers should not be expected to act on announcements that have not been passed in Parliament. Then even HMRC missed the inclusion of the clause about replacement subscriptions being made only to the same account until after the legislation came into force.

Over a year after that botched implementation, how many ISA managers are complying with simple things like updating text on their ISA declaration, even though it harms their business to refuse customers they can legally accept?

This set of changes will need to be mandatory, so the timeline must ensure all ISA managers can comply from day 1. That, or there's going to be a lot of work for ISA managers removing money from cash ISAs mid-year, along with a lot of unhappy customers.