New £12,000 limit on Cash ISA

friolento

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).

Having an accident or a serious health condition (yourself or a person you need to care for) which forces you to retire well before 65 doesn't generally involve good fortune 

Alexland

hallmark said:

This is going to completely wreck a lot of people's financial planning.

I do wonder if that's what those pushing this policy want. For anyone that's doing the right things in life they need punishing and having their investment strategy wrecked under the false cloak of encouraging people to invest more. I assume the changes to S&S eligible investments would apply to everyone regardless of age.

I'm paying close attention to which platforms are genuinely willing to stand up for their customer's best interests as it is my preference to give them my business in future.

AJ Bell have a good history of submitting intelligent comments and being critical of emerging policy where required, unlike HL who just want to suck up to anyone in power and say yes to anything.

Alexland

Section62 said:

And there are circumstances where going over to cash in your 50's or 60's is far from being a 'silly' thing to do.

My divorce happened during the Liz Truss interest rate period and at one point in the negotiation it seemed I would have to cash in all my ISAs to raise enough money to buyout the family home so I switched out of equities into money market funds for a while as I was unclear if I had a suitable investment timescale or not. This kind of sensible action would not be possible if we were disallowed from holding cash equivalent investments.

People's financial needs change over time so removing flexibility to move between asset types is harmful.

wmb194

Alexland said:

hallmark said:

This is going to completely wreck a lot of people's financial planning.

I do wonder if that's what those pushing this policy want. For anyone that's doing the right things in life they need punishing and having their investment strategy wrecked under the false cloak of encouraging people to invest more. I assume the changes to S&S eligible investments would apply to everyone regardless of age.

I'm paying close attention to which platforms are genuinely willing to stand up for their customer's best interests as it is my preference to give them my business in future.

AJ Bell have a good history of submitting intelligent comments and being critical of emerging policy where required, unlike HL who just want to suck up to anyone in power and say yes to anything.

BIB; on the anti-circumvention rules, HMRC's November Isa newsletter states, "These rules will apply to investors under the age of 65." So, subject to what becomes law, possibly not.

https://www.gov.uk/government/publications/tax-free-savings-newsletter-19/tax-free-savings-newsletter-19-november-2025

ColdIron

But of course that wouldn't have achieved the unstated goal of reducing the cash allowance

Zekko

Dropping the Cash ISA limit is simply not going to drive a culture of investing in stocks and shares, and by consequence, the government is making it more complex to operate a S&S ISA.

wmb194

ColdIron said:

But of course that wouldn't have achieved the unstated goal of reducing the cash allowance

No, but it would have had a better chance at achieving one of the stated aims i.e. improving liquidity on the London market. Combined with excluding them from SDRT, it might have been a good way to revitalise investment trusts as well.

jak22

The assumed benefit of reducing the limit - i.e. people being better off by having to invest in S&S instead - is only a theory, but the consequences are real enough - a reduction in choice, more confusion, risk, more work to implement for banks, and yet more new rules like no S&S to cash to try to close loopholes that should have been considered before the announcement.

It might be unintended consequences (just like £4 a month broadband rises as a result of swapping % for £s) but the solution is simple - accept the idea was wrong and just drop the cash ISA limit change

Happy_Minion

Instead of opening a S & S ISA when this starts does it make more sense to just add the £8k in to my SIPP?

Yorkie1

Happy_Minion said:

Instead of opening a S & S ISA when this starts does it make more sense to just add the £8k in to my SIPP?

That will depend on various factors, including other savings and plans you have. For example, will you need the money before 57 (if that's your normal pension age), will you pay tax on withdrawals from the pension (not the tax-free elements, of course), what your tax rates will be before and after retirement (tax relief in and rate out).