When i'm 65

Darnhall123

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

born_again

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

Your not being forced to do that.
You can just put the £8K into another savings acc.

Farway

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

Yes, but TBH it may not be worth it once you take into account trading fees and maybe losses in the S & S ISA

You may be letting tax tail wag the dog

If you just put the £8K into bog standard best interest savings account for one year, and pay any tax due, just how much would you be saving on that amount by using the S & S ISA you suggest?

wmb194

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

We don’t know the details yet but if the new rules are similar to the pre-2014 rules you’d be able to buy gilts with five+ years to run in an S&S Isa so there should still be low risk options should you need them.

 Anyway, at 65 you’re likely to still have plenty of years to take risk so you shouldn’t need to be too quick to move into cash or cash-like.

kermchem

I understand that the banks, building societies and asset management companies are still in discussion with the Treasury about how exactly this is all going to work, and the reports I saw somewhere suggested it was not exactly going well.

But, at age 60, heading for 65, I can still remember my kids turing 18 and their junior isas turning into adult isas on their birthday. I see zero good reason why my adult isas should not be able to turn into senior isas on my birthday.

Darnhall123

Farway said:

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

Yes, but TBH it may not be worth it once you take into account trading fees and maybe losses in the S & S ISA

You may be letting tax tail wag the dog

If you just put the £8K into bog standard best interest savings account for one year, and pay any tax due, just how much would you be saving on that amount by using the S & S ISA you suggest?

Thank you.
I've been using Dodl for the past year or so and they don't have any trading fees as such, so i'll probably just use them and if it is allowed, i'll transfer whatever is in the S&S account after a year or so into a cash ISA.
I was just querying how it'll work regarding previous years savings once I reach 65.

Darnhall123

born_again said:

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

Your not being forced to do that.
You can just put the £8K into another savings acc.

Well obviously i'm not being forced into anything and yes, I could just put it into another savings account, but that will be subject to tax so i'm not really sure what your point is?
Anyone with the full £20k to invest in an ISA IS being forced to direct £8,000 of the allowance into S&S if they want to enjoy the benefits of tax free on any interest earned.

eskbanker

Darnhall123 said:

born_again said:

Darnhall123 said:

I turn 65 in May 2028.

Like many others under 65, i'll only be able to invest £12k into a cash ISA in 27/28 when the rules change.
However, in 28/29, if I wait till my birthday in May and i'll be back to the full £20k allowance into cash if I choose to do so.

My question relates to the £8k i'm being forced to invest into a S&S ISA for the 27/28 tax year.
When I reach the grand old age of 65 the following year, will I be able to transfer the £8k and anything earned from it back into a cash ISA because i'll be 65 and the £12k/£8k split no longer applies?

Your not being forced to do that.
You can just put the £8K into another savings acc.

Well obviously i'm not being forced into anything and yes, I could just put it into another savings account, but that will be subject to tax so i'm not really sure what your point is?
Anyone with the full £20k to invest in an ISA IS being forced to direct £8,000 of the allowance into S&S if they want to enjoy the benefits of tax free on any interest earned.

The point is that your conclusion appears illogical - if you have more than £12K to deposit and don't feel comfortable with investing, then the more obvious response is to use non-ISA savings accounts rather than investing just because it's tax-free!  Yes, interest beyond your personal savings allowance will attract tax, but if you're fundamentally wanting to save rather than invest (for reasons of capital protection, risk, etc) then as above, don't let the tax tail wag the dog.

If you really see tax as being a major driver then you could consider SIPPs or even premium bonds?

TheTelltaleChart

I'm being forced to risk losing everything in a cryptocurrency crash, if I want to enjoy the potential benefits of a cryptocurrency boom!

Kim_13

It’s £8K S&S or pay the tax, so it would be closer to coerce than force. It is of course a carrot and stick approach. You are only unaffected if you have less than £12K, since in that case they do not say you have to put £2 in S&S for every £3 you put in Cash (which is where you end up if you have the full £20K. A transfer to Cash should be possible on the 65th birthday, but until the detail has been published we can only use precedent and logic to make a prediction as to how it will work. 

The cryptocurrency analogy isn’t quite how things work here. Of course you can’t receive the potential benefits of something if you haven’t put any money in it. But no one is saying we will tax you if you buy gold instead of cryptocurrency, altering the risk that the sum involved is at in the process. 

TheTelltaleChart

Kim_13 said:

no one is saying we will tax you if you buy gold instead of cryptocurrency, altering the risk that the sum involved is at in the process. 

Well, it's more the other way round. They're saying we'll tax you if buy cryptocurrency (because you haven't been allowed to buy it inside tax shelters), but perhaps not if you buy gold (because you have been allowed to buy gold ETNs inside tax shelters, and also because if it's in the form of gold coins issued by the UK then gains are exempt from CGT).

Taxes which favour certain kinds of assets over others are not at all unusual. That is neither force nor coercion!

I'm not saying it's a good idea, either. Personally, I'd rather get rid of all exemptions and exceptions, and 0% (or lower) rates for certain kinds of income, and lower rates for capital gains than income, and I'd abolish ISAs completely, and instead increase the personal allowance and other thresholds.

IMHO, A person with £x annual income from earnings should pay the same tax as a 2nd person with £x income from pensions + interest on savings accounts, or as a 3rd person with £x from dividends + capital gains on investments, or as a 4th with £x from BTL, and so on. (This becomes slightly more complicated when you allow that NI is also a tax on income. But it would still be possible to get close to the aim.)

But so long as we're talking about the current tax system (or where it's about to go), it's hyperbolic to talk about force or coercion when it just doesn't suit you perfectly. Start by deciding what asset mix is suitable for you, and then fit it within the available tax shelters as best you can. If that means paying some tax, so be it.