A think tank has made recommendations for the UK to cap tax free savings in ISA’s at £100k. Let’s hope Jeremy Hunt doesn’t seriously consider this, as yet another way to penalise those trying to save legitimately.
https://www.thisismoney.co.uk/money/saving/article-11640179/Isa-allowance-Hunt-urged-introduce-100-000-cap-Budget.html
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It’s an interesting idea. I’m not sure I support the idea of screwing over those who have saved to benefit those who haven’t.
On the other hand, helping those who couldn’t afford to save by taking a little from those who can afford it seems a worthy goal.
Guess it’s a good job I am not trying to make policy.
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‘People with more money have more in savings and investments’
Hardly groundbreaking stuff.
Financial education and additional opportunity for those on lower incomes is key.
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I can’t quite see how this will help those who can’t afford to save. Is the tax going direct to them?
I also don’t see why those who have diligently saved in their ISAs (instead of spending all their money) should be punished.
Fyi, I don’t have £100k in my ISAs but might have in a couple of years’ time.
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This policy would discourage savings
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Let’s not forget that people who have that kind of savings have (in general) paid a fair whack in income tax to get there.
*Editted to add ‘in general’ as there will always be people who ‘push’ the rules
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Seems like a pretty bad idea for a country with a near-singularly terrible housing system to make home ownership basically the only tax advantaged investment vehicle (at the high end). A lot of RF papers are interesting but this one just feels devoid of any second order thinking.
Please do link the actual report though, I can’t stand news articles that are just ‘think tank report says…’ or ‘scientists find…’. It seems insane in the age of the internet the habit of getting information through hearsay is still popular /rant
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It wouldn’t, because there’s no alternative. You can’t think of this policy in terms of market economics.
Hi Cameron.
Thanks for the suggestion and for linking the report. This is my first post since joining Freetrade, so I’m still learning best practices and just thought the article might be of interest.
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he wont do it
Welcome to the forum, sorry for the rude welcome I don’t want to put you off. It’s not like a rule or anything.
I just get annoyed in general when articles like this gets shared (even if it’s just a WhatsApp or something) when primary sources are so readily available.
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Hi @NeilR … It’s a great first post, you’ve got discussion going… Top work!
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Won’t happen.
I don’t think even these tories are stupid enough to do that. they would be alienating their main support base at a time when they are already hugely unpopular
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In the end it will discourage UK tax residen investors from investing.
If the Tories are serious about growth this is a walk in the opposite direction.
Despite the cost of living stuff, the stock market in the UK appears to be doing quite well at the moment.
Many are now considering using thier ISA allowance rather than holding certificates or investing into a GIA.
ISA is the last available option for high earners on capital gains and dividends.
If the government choose to do this it will alienate UK tax resident investors and will mean some give up as it may be easier to give up then risk a large tax bill each year.
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If i do understand the logic behind it: instead of having a £20k tax free ISA, it would become a £100k tax free ISA?
I don’t think the proposal is that the annual 20k subscription limit is increased to 100k. The 100k would be a cap on total isa value above which tax would start being paid. If I’ve understood correctly.
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Looks like the government is desperate to grab any taxes it can
Would make pension top ups more appealing.
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Until they screw you over there as well.
Lifetime Tax Allowance has been frozen for years, wouldn’t surprise me if it came down further. Capital Gains slashed, dividend allowance low. ISAs under threat.
Won’t make much difference to the mega rich who have accountants, offshore accounts and trusts. But it is the middle who are aspiring to growth wealth who will be hit hardest.
Reminds me of the old money v new money themes in the Great Gatsby.
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