New cash ISA limit for those turning 65 during the tax year

sje_111

I was surprised that Martin Lewis would suggest to the government to apply the 2027 reduction in cash ISA limit only to those under 65

Why would he suggest something that will quite likely discourage people from saving

Many people are not keen on using stocks and shares ISA products - I don't think this is a good move

masonic

https://forums.moneysavingexpert.com/discussion/comment/81954079#Comment_81954079

Most people aren't paid enough to be able to save more than £1,000 per month (that figure representing around 50% of the UK median take home pay). They'll be able to continue using cash ISAs for savings up to that level.

Those lucky enough to earn more can get a better net return using regular savers paying 6%+ alongside cash ISAs. There are also premium bonds for higher rate taxpayers.

Malchester

When you reach retirement, from personal experience, your risk level with savings is greater than before retirement. With the 5 to 10 year timescales for investments retirees, like me, are less likely to want to invest in a stocks and shares ISA so not applying the new regulations to people 65 and over seems sensible.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81954089#Comment_81954089

Generally, most people may drop a notch or two with investment risk when getting to retirement. A good proportion continue just as before because they still have 20-30 years to live and moving to cash could actually increase their risks, not reduce them.

The selection of age 65 seems a bit weird. 65 is irrelevant to most people. Its not the state pension age for example. It smacks of someone being very out of touch or in receipt of a civil service pension with a scheme retirement age thinking that is normal for everyone.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81954079#Comment_81954079

What gave you the impression that the government was encouraged to tweak the ISA regime by Martin Lewis? Even if he did suggest what you're implying, it would presumably be from the angle of highlighting the increased importance of saving (rather than investing) for the older cohort, i.e. on the basis that the cash ISA limit was going to be reduced anyway, it's justifying a carve-out for those over 65.

Sahara20

Has there been any new information as to whether the new cash ISA increases from £12,000 to £20,000 as soon as you turn 65 (whenever that is within the tax year) or if you have to wait until the next tax year to take advantage of the increased allowance?

masonic

https://forums.moneysavingexpert.com/discussion/comment/82000711#Comment_82000711

The rules around this still haven't been set.

Sahara20

OK. Thank you.

Rich2808

Looks like we will have a new PM and Chancellor by late September - so maybe these changes will never come in at all. Although they could of course make them even more punitive if as expected the government moves to the left.

This is Rachel Reeves policy - her successor's as set out in the autumn budget - might be different.

masonic

It might have needed to be kicked down the road anyway. With no clear agreement in sight on the details, banks are unlikely to have time to implement the new rules in time for April once they are settled. With all the upheaval, this probably won't get a great deal of attention in the coming weeks.