To wonder what the point of trying to save is?

Individuals saving cash makes sense for them (while inflation is under control) but is mostly bad for the economy as a whole. Good that people can withstand life events but really bad to have money taken out of circulation. Money is only really doing its job if it’s moving. So yes, it makes sense that the gov want to reduce cash savings. Holding about 6 months expenditure is often seen as the sweet spot.

Okay….. so consider sticking your cash in your pension instead. Though it will of course be invested in S&S… but at least you won’t have to do any homework.

If you are unsure of S&S ISAs, just go for a tracker, everyone tells me a global tracker fund is best, so that you don't lose out because one area goes down.

But if everyone does that how does it increase investing in UK plc?

My DH had a s and s ISA years ago. After 5 years it was worth less than what he paid in. And yes I know that long term it would probably have made money but when you need your money, you need your money. We now wouldn't touch a s and s ISA with a barge pole.

I am however going to get 18 y o DD to start a LISA and I'll pay £4000 into it for her.

I thought that the government would want people to save so that when they need a care home they'll be self funders and also partially funding other people who would otherwise be being paid for by taxpayers.

Wouldn't it be lovely to one day have a government that thinks more than 5 minutes ahead?

Anyone putting their money into cash ISAs if their horizon is 5+ years will not be optimizing their returns.

it doesn’t need in-depth knowledge of investing. MSE, Vanguard, Hargreaves Lansdown etc have simple guides. There are trackers that track various indices - UK, Europe, the World. Spread your ISAs among these and forget about them for 5, 10, 20 years… or however long you are from your retirement.

You’re slightly conflating two things (which isn’t surprising given their poor/slightly inaccurate names).

The stocks and shares ISA (really the ‘investment ISA’) enables you to invest in ‘securities’ - collectively stocks, indices, treasury bonds and corporate bonds. The point of the ISA is that it is a tax free wrapper so you do not pay tax on the income/dividends from bonds/stocks or capital gains.

A treasury bond or other bond as per NS&I can, as you say, offer attractive returns for lower risk vs stocks, if that’s your preference. But they are not tax efficient instruments and the coupon / interest is taxable.

SO, if you want a bond investment it is likely that most efficient way of accessing is thru the ‘stocks and shares ISA wrapper’ up to your annual allowance limit.

What tosh. Many people could spend less and many people could earn more. That doesn't apply to everyone. But if someone chooses to scrimp and save, they should be allowed to keep what they have saved. Otherwise, as OP has suggested, what is the point. Hi work enough hours to get by, then stop. Let's see what that does to the economy and public services. It's ok to want to keep your own money. That's not selfish.

The ISA wrapper is a tax free wrapper. That’s its whole purpose.

@Telemicus absolutely not asking for a bigger tax break. Just explaining why existing tax breaks on ISAs should continue, especially if I've been a higher rate tax payer for 10+ years. My point is that myself and people like me pay plenty of tax already.

Well in that case there’s nothing stopping you putting your money into the bank. People expect a better rate of return from an ISA, but to take zero risk AND not pay tax on the interest. If you want to make more money, you need to take more risks. If you want your money to be perfectly safe (which is absolutely understandable, especially for us older savers) you can’t expect a big return.

Sorry if I have misunderstood, I'm really not tying to start an argument. My interpretation of what you wrote is that you think people who have paid more tax in the past should get bigger tax breaks in the future. I have read and re-read and can't see what I have missed.

It's a managed fund via a financial advisor, not sure of the exact fund name. My kids have child ones via the same advisor (but different fund scheme) and theirs have done brilliantly! Mine does usually go up a little but last 3 months made small loss.

Do you think people are going to put the cash under their mattress if they reach the ISA limit?

The difference will be in savings accounts or S&S accounts (which are bigger earners for the banks), so why would it impact borrowing costs?

@Telemicusi don't know whether you're deliberately missing the point here or trying to start an argument. Either way I'm out.

So do you think that people who have earned lots of money in the past should have to pay less tax in the future?

Interesting take, not sure I agree.

In what way are those people being penalised? They still have their savings, they just don't get a massive tax break on the income generated by those savings. The people who pissed money up the wall have no savings and therefore no income being generated by savings either.

There is no tax on savings, only a tax on income generated from savings (which can be avoided with an ISA).

In the nicest possible way, fuck off! It is utterly ridiculous to claim that anyone able to save and trying to get together a house deposit (ie not even yet a homeowner!) is “rich”.

It speaks to your own grasping jealousy that such a thought would even enter your head, never mind make it into a post in a thread which isn’t even about “tax the rich!”, it’s about the government’s misguided attempts to get more money into the uk stock market because they’ve been told it’ll help with growth.

Other than growing fund managers’ income, it won’t do that because sensible money will go into a global tracker rather than anything uk-specific.

The loss of new cash ISA funding from banks (and more significantly building societies’) balance sheets will also have unfortunate but very predictable consequences for the cost of borrowing in future.

Keep cheering it on though - this stuff depends on there being a sizeable population of useful idiots.

Why should people who have been wealthy (putting money away in an ISA) for a long time get a bigger tax break than those who have only just started being able to save?

Look it another way, why should people of moderate means who have prudently saved for their retirement rather than pissing their money up the wall when they were younger be penalised?

Because those people have likely been paying a higher tax rate on their salaries, and for a longer time.

The worst possible thing you could do. What you have already saved won't be affected. Premium Bonds are rubbish.

Well - you can just invest that income in S&S instead of keeping it in cash, and continue to avoid paying any tax on the growth that way.

Your money will not disappear if in a world tracker as it tracks the major stock markets of the world. If it were to crash the world is fucked anyway and cash would be useless.

I fully support this proposal. It doesn't do enough but is a tiny step in the right direction. The current ISA system is bonkers.

An ISA is like a tax-free personal allowance for savings and investment income. For some utterly bizarre reason, that allowance gets bigger for people who have spent many years accumulating lots of money (by adding more and more into their ISA year after year, maybe £20k per year). Why should this be the case? Just make the total allowable ISA size a certain value, like £50k, for everyone, regardless of when money was invested.

Why should people who have been wealthy (putting money away in an ISA) for a long time get a bigger tax break than those who have only just started being able to save?

I'd like to know how treasury bonds will be treated. If they are counted as stocks and shares there's an easy workaround, as it's not really any different from a cash ISA in my view. Treasury bonds are very safe and you get a decent interest rate on them. Money is locked up for a month which will work for a lot of savers.