Cash ISAs capped at 12,000 (a year)

Darnhall123

borders said:

I await the details on when the over 65 limit kicks in. The tax year you turn 65, the tax year after you turn 65 or actually on your birthday? I will be 65 in 2027, so the timing is relevant for me. And even more so for my wife who's birthday is the 6th April. 

I wondered that too!

I’m 65 in May 2028 so I’ll have to work out what I can do. I’m guessing that I’ll hang on a month in 2028, the I’ll get the full £20k into cash when I turn 65. 

soulsaver

soulsaver said:

I believe there will be ISA 'hubs' at platform providers.  HL, HSBC, Lloyds etc mentioned by name in the speech.

I believe they will have restricted choices favouring 'British' businesses. Likely would be other restrictions closing  the often mentioned 'easy loopholes'.

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

Kim_13

Darnhall123 said:

borders said:

I await the details on when the over 65 limit kicks in. The tax year you turn 65, the tax year after you turn 65 or actually on your birthday? I will be 65 in 2027, so the timing is relevant for me. And even more so for my wife who's birthday is the 6th April. 

I wondered that too!

I’m 65 in May 2028 so I’ll have to work out what I can do. I’m guessing that I’ll hang on a month in 2028, the I’ll get the full £20k into cash when I turn 65. 

Or do the £12,000 in April and the remaining £8,000 when 65. Presumably this is why there is a delay of a year, so that the government and ISA providers can iron out if that would be allowed, or you’d have to wait until the tax year after turning 65 to do £20,000 cash.

Albermarle

soulsaver said:

soulsaver said:

I believe there will be ISA 'hubs' at platform providers.  HL, HSBC, Lloyds etc mentioned by name in the speech.

I believe they will have restricted choices favouring 'British' businesses. Likely would be other restrictions closing  the often mentioned 'easy loopholes'.

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

I would presume these will only be suggestions though for newbie investors, and if you want to invest in something else, then will be no problem, hopefully...

Swipe

soulsaver said:

soulsaver said:

I believe there will be ISA 'hubs' at platform providers.  HL, HSBC, Lloyds etc mentioned by name in the speech.

I believe they will have restricted choices favouring 'British' businesses. Likely would be other restrictions closing  the often mentioned 'easy loopholes'.

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

Will this just be for the people with Cash ISAs and the remaining £8K? I was under the impression that the normal £20K S&S ISA remains unchanged. Is that not the case?

wmb194

mwarby said:

wmb194 said:

mwarby said:

I guess you could always invest the remaining £8k in a money market fund like CSH2, although it has the downside of no protection in the unlikely event of CSH2 failing

This assumes cash-like investments aren't disallowed.

Lots of rather safe options compared to full on investing

Government bonds
Bond in general (especially funds which use ultrashort bonds)
Money market funds

I guess the hope is that by needing to find a fund that meets your risk tolerance, many will consider something a little more like investing like index funds, for at least some of their money 

Correct, and these may be the things that are disallowed. IIRC Longer dated bond funds were allowed but initially PEPs disallowed individual gilts, short dated bond funds and MMFs so it isn't without precedent. We need to wait for the detail.

flaneurs_lobster

Swipe said:

soulsaver said:

soulsaver said:

I believe there will be ISA 'hubs' at platform providers.  HL, HSBC, Lloyds etc mentioned by name in the speech.

I believe they will have restricted choices favouring 'British' businesses. Likely would be other restrictions closing  the often mentioned 'easy loopholes'.

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

Will this just be for the people with Cash ISAs and the remaining £8K? I was under the impression that the normal £20K S&S ISA remains unchanged. Is that not the case?

Be rather odd if they ring-fenced any stocks/funds just for the extra bit of a Cash ISA, or are you meaning more generally? There are no changes to S&S ISAs that I've seen, if you wanted to invest in these "curated" UK-heavy funds then I'm sure it'll be allowed.

leosayer

EthicsGradient said:

Time2Go_25 said:

Audaxer said:

knigma said:

Any idea what this means for transferring £20k+ from a S&S ISA to a Cash ISA, and how this will be restricted?

I don't think transferring existing ISA balances would be restricted as she only referred to changing the annual ISA allowance split, and not until 2027. 

One of the questions I get, is if you put your £20k in a S&S ISA, can you transfer it to a cash ISA

Yes, that is a good question - what would they do, say "8k must remain in the S&S ISA"? It becomes very difficult to track all the money (especially with contributions over multiple years, and growth).

Banning transfers from S&S ISA to a Cash ISA?

I wonder if this might be a precursor to moving to a single type of ISA product that will limit the amount of cash you can hold.

The 2% increase in income tax on non-ISA savings interest would align with that.

Swipe

flaneurs_lobster said:

Swipe said:

soulsaver said:

soulsaver said:

I believe there will be ISA 'hubs' at platform providers.  HL, HSBC, Lloyds etc mentioned by name in the speech.

I believe they will have restricted choices favouring 'British' businesses. Likely would be other restrictions closing  the often mentioned 'easy loopholes'.

HL comment
"These new hubs will help meet this retail investor demand with curated stocks and fund ideas, with the funds highlighted classified to one of the three IA UK equity sectors (or other equivalent sector classification) - UK All Companies, UK Equity Income and UK Smaller Companies, which require an 80% allocation to UK equities. We welcome the opportunity to showcase the best of British across our platform - both direct equities and manufactured and third-party funds and investment trusts.

Will this just be for the people with Cash ISAs and the remaining £8K? I was under the impression that the normal £20K S&S ISA remains unchanged. Is that not the case?

Be rather odd if they ring-fenced any stocks/funds just for the extra bit of a Cash ISA, or are you meaning more generally? There are no changes to S&S ISAs that I've seen, if you wanted to invest in these "curated" UK-heavy funds then I'm sure it'll be allowed.

With the mention in the earlier post of demand for UK investor hubs for ISAs, I'm worried that we might be forced to invest £8K of the £20K in UK equities. Plus what happens to the £20K MMF I hold in my S&S ISA from a couple of years ago? It's all beginning to sound like a complicated mess.

phlebas192

leosayer said:

EthicsGradient said:

Time2Go_25 said:

Audaxer said:

knigma said:

Any idea what this means for transferring £20k+ from a S&S ISA to a Cash ISA, and how this will be restricted?

I don't think transferring existing ISA balances would be restricted as she only referred to changing the annual ISA allowance split, and not until 2027. 

One of the questions I get, is if you put your £20k in a S&S ISA, can you transfer it to a cash ISA

Yes, that is a good question - what would they do, say "8k must remain in the S&S ISA"? It becomes very difficult to track all the money (especially with contributions over multiple years, and growth).

Banning transfers from S&S ISA to a Cash ISA?

I wonder if this might be a precursor to moving to a single type of ISA product that will limit the amount of cash you can hold.

The 2% increase in income tax on non-ISA savings interest would align with that.

IIRC, there used to be a rule that you couldn't hold significant amounts of cash in PEPs (and maybe S&S ISAs in their early years) and that any cash had to be temporary for the purpose of buying shares in the future. But it was never enforced - indeed [for reasons] I ended up having 25+% of a PEP in cash for several years and it wasn't once queried. 

These days there are plenty of pseudo-cash options for S&S ISA holders and I can't imagine that the regulations will be written in a way that effectively bans all of these (eg it would be very strange if the UK Govt banned holding UK gilts in a UK ISA) so I suspect that there won't be any practical obstacles to holding cash or cash equivalents in a S&S ISA.