New £12,000 limit on Cash ISA

Aretnap

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

seacaitch

EthicsGradient said:

If you really want to use an ISA like a pension, then gilts and bonds would be the usual route, not cash/cash-like holdings. 

2022 was a wake-up call for many people of what "duration risk" means and in response have dramatically reduced duration of their safer assets.

Furthermore, with sky-high government debt/GDP ratios and expansive fiscal policies, many investors think the term premium for longer term bonds offered is simply insufficient for these conditions and risks.

In light of these points, it's understandable if not rational for them to desire to keep duration short on these safer holdings - as they've been able to up until now - but these rule changes act against these rational choices.

Section62

Aretnap said:

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

I wouldn't call bereavement or life-limiting or other serious illness "good fortune", but each to their own.

poseidon1

If all the friends and relatives around me are indicators of how these proposed cash ISAs  changes will affect the wider general public and their future behaviour, then from my experience,  absolutely no change whatsoever.

None of those around me have thought fit to to do any personal reading following the budget. Amazingly, most seem entirely oblivious to the 2% investment income surcharge on the horizon and the reduction to the annual cash isa limit is pretty academic for most of them, all in all  a complete lack of engagement.

This forum in my view is a (very) tiny echo chamber of engaged individuals, in no way representative of the general population and as such our views/ actions, other than to improve our own personal circumstances will not move the needle one iota.

Be interesting to note whether friends and family of other posters here, have demonstrated any higher levels of engagement in these budget issues, or are the conversations very much confined to forums such as this.

Section62

poseidon1 said:

If all the friends and relatives around me are indicators of how these proposed cash ISAs  changes will affect the wider general public and their future behaviour, then from my experience,  absolutely no change whatsoever.

None of those around me have thought fit to to do any personal reading following the budget. Amazingly, most seem entirely oblivious to the 2% investment income surcharge on the horizon and the reduction to the annual cash isa limit is pretty academic for most of them, all in all  a complete lack of engagement.

This forum in my view is a (very) tiny echo chamber of engaged individuals, in no way representative of the general population and as such our views/ actions, other than to improve our own personal circumstances will not move the needle one iota.

Be interesting to note whether friends and family of other posters here, have demonstrated any higher levels of engagement in these budget issues, or are the conversations very much confined to forums such as this.

I expect time will march on to 2027 and then this forum will get a rash of "Its a SCAM!!!!!!!" type threads when people discover their "tax-free" account has had a tax charge levied on it. etc etc.

Enzo_L

Section62 said:

Aretnap said:

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

I wouldn't call bereavement or life-limiting or other serious illness "good fortune", but each to their own.

Nor would I call redundancy and finding that no one will recruit you if you're in your early sixties "good fortune" either.

Aretnap

Section62 said:

Aretnap said:

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

I wouldn't call bereavement or life-limiting or other serious illness "good fortune", but each to their own.

The comment was in response to discussion of how the changes would affect retirement planning. Planned early retirement is not the same as illness or incapacity etc.

Enzo_L said:

Section62 said:

Aretnap said:

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

I wouldn't call bereavement or life-limiting or other serious illness "good fortune", but each to their own.

Nor would I call redundancy and finding that no one will recruit you if you're in your early sixties "good fortune" either.

Or involuntary unemployment. 

(But redundancy in my late 50s is very much on my wish list, fortunate soul that I am).

Section62

Aretnap said:

Section62 said:

Aretnap said:

Section62 said:

Aretnap said:

EthicsGradient said:

...

Also, even if you do have the good fortune to retire before 65, going all in on cash in your 50s or early 60s would be an even sillier thing to do than going all in on cash at 65.

'Early' retirement isn't always as a result of "good fortune".

Not solely the result of good fortune - but good fortune is always part of it. (I say as someone who plans to retire well before 65 myself).

I wouldn't call bereavement or life-limiting or other serious illness "good fortune", but each to their own.

The comment was in response to discussion of how the changes would affect retirement planning. Planned early retirement is not the same as illness or incapacity etc.
...

But surely good retirement planning should allow for the risk of illness/incapacity/unemployment affecting the plan and bringing the retirement date much further forward?  If your plan doesn't allow (somehow) for the 'early' date being sooner than chosen then it doesn't seem to be much of a plan.

That was my understanding of Hallmark's comment "This is going to completely wreck a lot of people's financial planning".  That chimes with me because I'm already thinking whether I want as much tied up in a S&S ISA as I'd previously aimed for.  Under the old plan I could de-risk any time by transferring from a S&S ISA into a cash ISA.  If the speculated changes happen that wouldn't necessarily work without additional tax to pay.

caper7

Would there be a charge on cash that doesn't earn any interest within a s&s ISA?
I believe you get interest in HL but not in Iweb for instance.

MisterMotivated

No there would not