At 52, single and no family or friends support network, I’ve only just really started to fully understand ISAs and started to include them in my savings plan for my retirement in my 60s. So trying to be proactive and look after my future so is a bit gutting they intend to reduce the threshold anywhere from 4-10k from 20k.
Totally agree with Matin Lewis who sums it up really well with his statement: “I think it's a mistake. I doubt it'll substantially nudge people to invest not save; said to be the aim.
This isn't nudge economics, it's likely just piss people off economics.
My suspicion is that for many who use cash ISAs, it would just result in them having to pay more tax on their relatively paltry savings interest rates, and not having an epiphany and thinking, "oooh, I'll just fill up the remainder of my ISA allowance with investments instead".
Those especially in retirement are unlikely to want to up their risk profile.
I am in favour of encouraging people to invest. It's good for individuals over the longer term and for the economy, especially if a way is found to encourage people to invest in UK firms. And we do have a problem with risk appetite in the UK.
Yet this isn't the route to do that. I'll be disappointed if the Chancellor chooses to listen to the big investment firms in the City, and shut down many building societies and consumer groups who've said it's not a good route.
Instead, let's start a conversation about how we encourage investments – even possible intervention when people save to explain other options. We need to educate, provide better one-on-one easy guidance, and start to change the way people think about risk.
But let's use the carrot, not a stick.”