I think this is what the PM meant by kids doing more ‘maths’ - it wasn’t more algebra or quadratic equations, it was learning basic budgeting, understanding mortgages, pensions, investing, why buy now pay later is not a great option etc.
Sadly if they were to cut this loophole, it will be the charities which will suffer from no longer getting those donations from the rich.
Capping the ISA will hurt the lower/middle earners but not help those who can’t save at all. The rich will likely just move to offshore accounts.
Except some of those aren’t taxes (despite what some would have you believe) and so what? As a society we expect Govt to provide certain things which costs money and therefore needs tax income. The NHS and state pensions being obvious large ticket examples.
I’ll reiterate that if you’re going to be affected by such a change (not that it is Govt policy anyway) then you’re already in the top 2-3% of savers.
Someone who has mega thousands would find the 20k a tax year ISA limit restricts how much they can invest of they stick to an ISA only.
Many would use general invest accounts as I doubt most would just stop investing entirely once they’ve reached thier 20k limit.
Some might, sure! I admit it’s definitely in the team of possibility for some.
Someone who invests 135k can only store 20k of that years allowance in an ISA. They are left with 2 options. Cease investing at the limit or put 115k in a general account (or certificated shares if they prefer) this netting the taxman benefits.
While I do agree we should pay tax for the benefit of society, well up to a point.
Doing the 100k lifetime limit on ISAs is a hard sell all the time our taxes still pay for MPs second and third homes and swimming pool repairs etc.
I think there’s real political capital to be had in reforming the MPs allowances scheme’s (and offshore loopholes many of them use) before we go for the ‘little man’ with his or her ISA.
I say when we are ready to have a serios discussion on reforming the MPs allowances system and the offshore loopholes system, then maybe I’m willing to discuss some form of ISA reform.
What’s good for the goose is good for the gander, or something like that.
This proposed £100K limit is absolutely an attack on the already squeezed middle. I live a sensible (frugal) lifestyle to allow me to save and invest.
This won’t affect “rich” people in the slightest. The government should be targeting loopholes and legal tax dodging by companies and individuals as a priority.
The whole tax system is too complicated, the very rich use specialists to navigate it to their advantage something us ordinary folk cannot.
There should be a root and branch reform possibly going to a flat tax system where there are no grey areas loop holes etc to be exploited.
This conversation is getting a bit mixed. Just because someone thinks ISA should be taxed at X amount doesn’t mean the tax loopholes for the rich should not also be fixed.
I believe the ISA of £20k a year is far too high and should be nearer £10k as anyone who has a spare £20k every year is very well off but I do not think there should be a limit for the total. If £20k a year is to stay I do think anything over the average UK earning, for example, in profit realised each year should be taxed even if a lower rate.
Poor people will not usually even contemplate being able to have an ISA and will feel people able to get large unearned incomes from tax loopholes very unfair and I agree to an extent even though it would hurt me financially.
People always point to those richer but as much as they MUST be made to pay maxed out yearly ISA’s are also pretty rich people.
This is the mindset from the savages in ‘power’, they seem to want the middle-income earners to fall back into living pay check to pay check, so if you are able to contribute to an isa on top of your workplace or personal pension AND still live a lifestyle, then they’re probably considering you have it too good and time for you to get back in pay check to pay check mode.
£20K per year into an isa should be increased every 5 years. Currently, you could be 25 & on £40k per year and spend 3 - 5 years either living at your family home or in a low-cost-lifestyle country working online and build up £60-£100k in isa investments then focus on a property deposit and move on from there.
For many others, maybe on £25k - £35k, the same rule could apply with just smaller numbers possibly contributing £5k - £8k per year for 3 - 5 years.
The issue here really is the question I’ve been asking since 2018; What Is The British Dream?
Nobody seems to have laid it out in doable terms and with multiple options on how to achieve these targets on investments, property deposits, lifestyle targets etc etc…
This is just a suggestion from a think tank, instead.
Leave isa’s alone and reduce the tax relief that higher rate tax payers can claim on pension contributions.
This must be billions a year.
It doesn’t seem unreasonable to me. I can’t see how it stops you savings. It didn’t always exist.
I see it going this way maximum £100,000. Those who have already put more in won’t be penalised.
Note I have put £60,000 in ISA and have about £80,000 that could go in eventually. So I will loose out. I have always thought it was to generous.
Of course another option might be to just lower to £10,000 which was the original amount.
