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  • FIRST POST
    • MSE Guy
    • By MSE Guy 6th Oct 10, 11:17 AM
    • 1,628Posts
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    MSE Guy
    MSE News: Isa limits to stay, says Treasury financial secretary
    • #1
    • 6th Oct 10, 11:17 AM
    MSE News: Isa limits to stay, says Treasury financial secretary 6th Oct 10 at 11:17 AM
    This is the discussion thread for the following MSE News Story:

    "Mark Hoban has denied claims the Government is considering reducing Isa tax incentives in the upcoming spending review ..."

Page 1
    • dunstonh
    • By dunstonh 6th Oct 10, 12:08 PM
    • 98,257 Posts
    • 66,474 Thanks
    dunstonh
    • #2
    • 6th Oct 10, 12:08 PM
    • #2
    • 6th Oct 10, 12:08 PM
    Which effectively sticks two fingers up at the Labour MP that spouted out the lies last week and the quite news period decided to run with that scaremongering.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • black taxi
    • By black taxi 6th Oct 10, 12:23 PM
    • 1,810 Posts
    • 6,329 Thanks
    black taxi
    • #3
    • 6th Oct 10, 12:23 PM
    • #3
    • 6th Oct 10, 12:23 PM
    if isa was lowered---there would be no tories left in uk
    48515 interest 181 (2009)debt/mortgage-MFIT/T2/T3
    debt/mortgage free 28/11/14
    vanguard shares index isa 1000
    credit union 400
    emergency fund500
    #81 save 20184200
    • JimmyTheWig
    • By JimmyTheWig 6th Oct 10, 12:53 PM
    • 11,848 Posts
    • 11,390 Thanks
    JimmyTheWig
    • #4
    • 6th Oct 10, 12:53 PM
    • #4
    • 6th Oct 10, 12:53 PM
    Surely someone able to put 10k a year into savings is significantly better off than a family earning 44k.
    Don't see how they can justify keeping this limit but scrapping child benefit.
  • chedburgh
    • #5
    • 6th Oct 10, 1:09 PM
    • #5
    • 6th Oct 10, 1:09 PM
    Surely someone able to put 10k a year into savings is significantly better off than a family earning 44k.
    Don't see how they can justify keeping this limit but scrapping child benefit.
    Originally posted by JimmyTheWig
    Easy, everyone has same ISA limit to utilise, sounds fair.

    So why should the less well off pay for the child benefit of those earning more, when it would be better they had a chance to use their ISA limit?
    Last edited by chedburgh; 06-10-2010 at 1:12 PM.
    • Jonbvn
    • By Jonbvn 6th Oct 10, 1:13 PM
    • 5,355 Posts
    • 5,643 Thanks
    Jonbvn
    • #6
    • 6th Oct 10, 1:13 PM
    • #6
    • 6th Oct 10, 1:13 PM
    Surely someone able to put 10k a year into savings is significantly better off than a family earning 44k.
    Don't see how they can justify keeping this limit but scrapping child benefit.
    Originally posted by JimmyTheWig
    Easy.

    An ISA is basically a vehicle to assist people in saving (usually) for retirement.

    Child benefit for reasonably well-off people cannot be justified.

    BTW, the CB cut does effect us.
    In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot
    • JimmyTheWig
    • By JimmyTheWig 6th Oct 10, 1:40 PM
    • 11,848 Posts
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    JimmyTheWig
    • #7
    • 6th Oct 10, 1:40 PM
    • #7
    • 6th Oct 10, 1:40 PM
    Easy, everyone has same ISA limit to utilise, sounds fair.
    Originally posted by chedburgh
    I'm not saying it shouldn't be the same for everyone. I'm just saying that if they brought the limits back to what they were a few years ago then it would only be the well off that would suffer.
    And it really would be the well off in this instance. This beats any form of means-testing that you can think of. Because it is self-enforcing.

    So why should the less well off pay for the child benefit of those earning more
    They shouldn't. The money should be raised by taxing the highest earners.

    when it would be better they had a chance to use their ISA limit?
    With the best will in the world, the "less well off" are never going to get close to saving 10k in a single year.
    • triplea35
    • By triplea35 6th Oct 10, 3:17 PM
    • 255 Posts
    • 93 Thanks
    triplea35
    • #8
    • 6th Oct 10, 3:17 PM
    • #8
    • 6th Oct 10, 3:17 PM
    Cash ISA's are virtually worthless to anyone other than higher rate tax payers. You can get better rates 'net of tax'. The only people profiting from ISA's are the Banks.
    • Lokolo
    • By Lokolo 6th Oct 10, 3:39 PM
    • 20,102 Posts
    • 15,243 Thanks
    Lokolo
    • #9
    • 6th Oct 10, 3:39 PM
    • #9
    • 6th Oct 10, 3:39 PM
    Surely someone able to put 10k a year into savings is significantly better off than a family earning 44k.
    Don't see how they can justify keeping this limit but scrapping child benefit.
    Originally posted by JimmyTheWig
    I believe it's not based on family earnings, but based on 1 person earning over that.

    So you can have 2x39k and still get CB?

    This is what I read in other posts anyway...
    • Lokolo
    • By Lokolo 6th Oct 10, 3:41 PM
    • 20,102 Posts
    • 15,243 Thanks
    Lokolo
    Cash ISA's are virtually worthless to anyone other than higher rate tax payers. You can get better rates 'net of tax'. The only people profiting from ISA's are the Banks.
    Originally posted by triplea35
    Hm, the highest instant access rate is 2.89% using moneysupermarket. After tax thats 2.3%.

    My ISA is 2.8% instant access.

    ISAs have gone down further than Non ISAs have, but you can still get a good deal out of them if you look around.
  • rb10
    Cash ISA's are virtually worthless to anyone other than higher rate tax payers. You can get better rates 'net of tax'. The only people profiting from ISA's are the Banks.
    Originally posted by triplea35
    For a basic rate taxpayer:

    Best instant access ISA: Halifax ISA Direct Reward (2.8% or 3%)
    Best instant access non-ISA: Natwest e-Savings (2.28% net)

    Which is better, 2.28% or 3%?
    • JimmyTheWig
    • By JimmyTheWig 6th Oct 10, 3:47 PM
    • 11,848 Posts
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    JimmyTheWig
    I believe it's not based on family earnings, but based on 1 person earning over that.

    So you can have 2x39k and still get CB?

    This is what I read in other posts anyway...
    Originally posted by Lokolo
    Yes, you are right. But if one parent doesn't work in order to look after the children then the limit is 44k. They certainly wouldn't be able to afford to put 10k into savings in a year.
  • bendix
    Yes, you are right. But if one parent doesn't work in order to look after the children then the limit is 44k. They certainly wouldn't be able to afford to put 10k into savings in a year.
    Originally posted by JimmyTheWig
    Yes, and if my auntie jean had a d**k she'd be my uncle john.

    Blah blah blah. Get over it. CB is on its way out for people paying high tax. And there's much more to come :-)
    • JimmyTheWig
    • By JimmyTheWig 6th Oct 10, 4:12 PM
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    JimmyTheWig
    My point is that they said they were doing the child benefit changes because higher earners should be making more contribution. I'm saying that reducing the ISA annual limit would have been a much fairer way of doing it.
    • Lokolo
    • By Lokolo 6th Oct 10, 4:18 PM
    • 20,102 Posts
    • 15,243 Thanks
    Lokolo
    My point is that they said they were doing the child benefit changes because higher earners should be making more contribution. I'm saying that reducing the ISA annual limit would have been a much fairer way of doing it.
    Originally posted by JimmyTheWig
    Hm but the only savings made would be 20% of the interest of the difference.

    So for a mum and dad, 10,200 -> 5,100 (say they halve the ISA limit for examples sake).

    So the parents lose out on 5,100 of ISA.

    Say 3%. 5,100 is 153.

    -20% and this is what the goverment is actually losing out on, means 30 for 2 people a year.

    If I have explained it well enough for others to understand. This is hardly a massive saving compared to CB? (Although I don't know how much CB is, I'm sure its more than 30 a year)
    • miller
    • By miller 6th Oct 10, 4:22 PM
    • 1,309 Posts
    • 483 Thanks
    miller
    Cash ISA's are virtually worthless to anyone other than higher rate tax payers. You can get better rates 'net of tax'. The only people profiting from ISA's are the Banks.
    Originally posted by triplea35
    Its true, there have been cases where banks have been paying different rates on equivalent types of account.

    Despite being a benefit, ISA's really hack me off in terms of administration. It would be great if they were as easy to transfer like taxable accounts.
  • bendix
    My point is that they said they were doing the child benefit changes because higher earners should be making more contribution. I'm saying that reducing the ISA annual limit would have been a much fairer way of doing it.
    Originally posted by JimmyTheWig
    Yes, because recouping the tax foregone on 3% interest of whatever the reduced ISA allowance would be will make a massive difference to tax coffers, compared to not giving spoilt middle class kids of high tax rate parents 1000+ a year that's not needed.

    How hard is it to think these things through? Seriously.
    • JimmyTheWig
    • By JimmyTheWig 7th Oct 10, 8:15 AM
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    JimmyTheWig
    I take the point that this wouldn't have generated much.
    But if we're "all in this together" then this seems like an easy cut to make that won't hurt many people.

    And remember that the government saving would be just over double that next year, etc.
  • chedburgh
    I take the point that this wouldn't have generated much.
    But if we're "all in this together" then this seems like an easy cut to make that won't hurt many people.

    And remember that the government saving would be just over double that next year, etc.
    Originally posted by JimmyTheWig
    I dont see how cutting payments to well off middle class families will hurt them? Why the money is going to them and not the less well off is really what puzzles me.
    • michaels
    • By michaels 7th Oct 10, 11:58 AM
    • 22,394 Posts
    • 103,125 Thanks
    michaels
    Surely it would be more sensible to have added a lifetime cap on the (net) amount that could be paid in to ISAs?
    Cool heads and compromise
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