'Save cash ISAs and keep £20,000 limit' urge building societies in open letter to the Chancellor

Albermarle

Shylock_249 said:

I wonder what the effect would be to many of the small savings banks and building societies if savers decided to save 5k in banks/building societies and 16k in UK S&S.  I'd think many of them would go to the wall and there might very well be runs on banks similar to those seen when Northern Rock (almost) folded and would the FSCS be able to compensate ALL savers if say 15 banks folded?

Banks tend to have problems when they have a lot of bad debts, rather than a reduction in savings held with them.
Historical cash Isa' s were never going to be affected either . There is a LOT more money in those than in current year ones.
In any case it is all theory as its not going to happen.

clairec666

Shylock_249 said:

I wonder what the effect would be to many of the small savings banks and building societies if savers decided to save 5k in banks/building societies and 16k in UK S&S.  I'd think many of them would go to the wall and there might very well be runs on banks similar to those seen when Northern Rock (almost) folded and would the FSCS be able to compensate ALL savers if say 15 banks folded?

Hard to tell exactly what would happen, but I suspect that a fair proportion of savers would avoid stocks and shares and instead put their money into taxable savings accounts, therefore reducing the impact on banks and building societies.

MACKEM99

clairec666 said:

Shylock_249 said:

I wonder what the effect would be to many of the small savings banks and building societies if savers decided to save 5k in banks/building societies and 16k in UK S&S.  I'd think many of them would go to the wall and there might very well be runs on banks similar to those seen when Northern Rock (almost) folded and would the FSCS be able to compensate ALL savers if say 15 banks folded?

Hard to tell exactly what would happen, but I suspect that a fair proportion of savers would avoid stocks and shares and instead put their money into taxable savings accounts, therefore reducing the impact on banks and building societies.

Thats exactly what the proposal is designed to do, bring in more tax revenue.

ZeroSum

boingy said:

EthicsGradient said:

boingy said:

Just another U-turn. I doubt she'll be in the job much longer, especially given the numbers for May that have just been released.

So "continuing the policy that has been in place for several years" is now a "U-turn"? I think we need to tighten up the definitions we use in discussions.

"Plans are now on hold" is a U-turn.

Except the rumours started at the budget, then she apparently uturned on something that was never announced. Then at the spring statement she uturned on  the unturn for thinking about it again. Then unturned on the uturn of the uturn for scrapping it for a 2nd time, then uturn of a uturn of a uturn of a uturn of a uturn for reinstating it & scrapping it for a 3rd time. See how this work?

Or maybe its just the right wing press stirring things. The policy (or is that an aspiration now like reform do) was always questionable due to all the additional complications that have been added over the last 25 years. No one actually knows what the plans are since no one from the government has actually mentioned anything about this.

x44

Most likely it was all HMG deliberatly leaking via hints and whispers the proposals to see what the reaction would be.

Gives them plausible deniability when they have to drop them that well actually they never existed as plans anyway.

All without having to officially announce that "this" is what they would like to do.....and getting hammered and actually having to do a real U-turn.

It's been going on now for many years - if not decades.

The times when budget changes were sprung on an unsuspecting public and finance industry on budget day in the speech are long gone.

The other trick they play is hiding the worst part of the budget in the small print not mentioned in the speech but sneaked out on a Friday afternoon in some obscure briefing document.

TheBanker

ZeroSum said:

boingy said:

EthicsGradient said:

boingy said:

Just another U-turn. I doubt she'll be in the job much longer, especially given the numbers for May that have just been released.

So "continuing the policy that has been in place for several years" is now a "U-turn"? I think we need to tighten up the definitions we use in discussions.

"Plans are now on hold" is a U-turn.

Except the rumours started at the budget, then she apparently uturned on something that was never announced. Then at the spring statement she uturned on  the unturn for thinking about it again. Then unturned on the uturn of the uturn for scrapping it for a 2nd time, then uturn of a uturn of a uturn of a uturn of a uturn for reinstating it & scrapping it for a 3rd time. See how this work?

Or maybe its just the right wing press stirring things. The policy (or is that an aspiration now like reform do) was always questionable due to all the additional complications that have been added over the last 25 years. No one actually knows what the plans are since no one from the government has actually mentioned anything about this.

We had all of this speculation over pensions last year. Speculation that Salary Sacrifice would be banned, and speculation that the tax free cash allowance would be removed. Which didn't happen.

Then a few months later a load of stories in the press from people who'd made silly decisions based on the speculation, and were trying to find someone to blame because their mistakes had cost them money.

With ISAs, I think the system can be undoubtedly be improved, and I think the £20k cash allowance is generous, especially compared to what it used to be and taking into account that most people also have a £1,000 or £500 Personal Savings Allowance. But no point making financial plans based on gossip and rumour, best to wait until things are announced. 

Kim_13

TheBanker said:

ZeroSum said:

boingy said:

EthicsGradient said:

boingy said:

Just another U-turn. I doubt she'll be in the job much longer, especially given the numbers for May that have just been released.

So "continuing the policy that has been in place for several years" is now a "U-turn"? I think we need to tighten up the definitions we use in discussions.

"Plans are now on hold" is a U-turn.

Except the rumours started at the budget, then she apparently uturned on something that was never announced. Then at the spring statement she uturned on  the unturn for thinking about it again. Then unturned on the uturn of the uturn for scrapping it for a 2nd time, then uturn of a uturn of a uturn of a uturn of a uturn for reinstating it & scrapping it for a 3rd time. See how this work?

Or maybe its just the right wing press stirring things. The policy (or is that an aspiration now like reform do) was always questionable due to all the additional complications that have been added over the last 25 years. No one actually knows what the plans are since no one from the government has actually mentioned anything about this.

We had all of this speculation over pensions last year. Speculation that Salary Sacrifice would be banned, and speculation that the tax free cash allowance would be removed. Which didn't happen.

Then a few months later a load of stories in the press from people who'd made silly decisions based on the speculation, and were trying to find someone to blame because their mistakes had cost them money.

With ISAs, I think the system can be undoubtedly be improved, and I think the £20k cash allowance is generous, especially compared to what it used to be and taking into account that most people also have a £1,000 or £500 Personal Savings Allowance. But no point making financial plans based on gossip and rumour, best to wait until things are announced. 

Sometimes it works, sometimes it doesn’t. People acting on speculation need to accept that. It is a form of gambling. Realising a capital gain before the budget would have paid off, since they increased the tax rate from budget day and even retrospectively taxed anyone who had sold an asset that morning, before the increase had been announced.