To think Rachel Reeves patronised the public with her rhetoric on cash ISAs?!

[Hulabalu]

I paraphrase but she said she wanted to cut the ‘cash’ ISA allowance from 20k to a fraction of that but allow people to still do the 20k stocks & shares ISA. She said something like she wanted “peoples hard earned money put to work in the stock market”.
She gave ZERO thought to people’s attitude to risk, that they might not want to risk their money in stock market.
She just wanted people investing in UK companies to boost economy. Not that people would have necessarily invested in Uk stocks.
Thankfully the banks etc stepped in and stopped her stupid plan
But I now can’t stand the woman! How dare she try to “sell” her plan to us and take us for fools 😡

Maybe there is misogyny behind the scenes from someone ( not Keir, he seems decent guy) , maybe she is menopausal, I don’t want to be quick to judge someone for displaying emotion , I don’t think it makes someone weak.
BUT I do judge her & government for threatening to mess around with cash ISA & lying to our faces about it

What do you believe she is lying or pretending about?

See my OP, she said she wants us to invest in stocks and bonds isa so our “hard earned money is working better for us”

Everyone seems to ignore that tax benefits like this are designed to shift behaviour. They're not designed because there is some inherent necessity that your income from interest earned on your savings should be subject to less tax than your income from work, or pensions, or self-employment. It was designed to encourage people to save. Lots of good reasons to do so at the time.

There's a reasonable argument that the necessary shifts in behaviour now is to encourage more people to invest - less money sitting around in bank accounts and more being used to fund business activity to create jobs and generate growth.

I'm not 100% convinced that this is necessarily the right way to achieve that, but getting more money invested in the economy is absolutely the right thing to be aiming for.

And I'd rather have a Chancellor who explores how best to do that but sells it in a 'patronising' way than a Chancellor who has no ideas at all on boosting investment.

I read the OP. But I'm not clear on what you think her 'real' reason is for the ISA proposal.

Purely a tax take assuming that people won't go into S&S ISAs and more into taxable cash savings? She wants people to invest in UK companies to grow the economy? An evil plan to unnerve people who don't like any risk in their portfolios?

Incidentally, it is also possible for more than one reason to support a policy change.

So it is possible to support cutting the Cash ISA limit because it would direct more money into investment and boost the economy and because it would likely result in better returns for people and therefore overall increases in wealth in the country (with attendant economic benefits).

The claim that Reeves stated reason for exploring this was a lie is nonsense.

The point is this.

Reeves is being disingenuous (again). The real reason she wants to ‘reform’ pensions, is to create mega funds, which will be compelled to invest a certain percentage of their capital in UK infrastructure projects etc. Similarly, with the proposed change to ISA’s - irrespective of whether its the right investment decision for the investor and/or offers the best returns.

I have been cutting my exposure to UK equities, and will continue to do so, given the utter horlicks Labour are making with the economy.

It probably is in their interests, unless those savings are short term. Keeping your money in cash savings is a sure fire way to have it eroded by inflation over the long run. Investing is riskier in the short run but safer in the long run, because it’s more likely to beat inflation. If you’re saving for 20+ years then, with some exceptions, a cash ISA is probably a really bad idea.

I voted Labour and I think that Reeves is totally out of her depth as chancellor and is in fact a danger to the economy.

It has been one disastrous idea after another under her 'leadership'.

Starmer needs to get rid of her.

Exactly, she's not hidden the fact that she wants to increase investment. So I'm not sure why you would feel lied to. As PP says, it's possible to have more than one reason behind a policy.

Oh ok

The real problem is that the public do not seem to understand that you can't have European public services with American levels of tax.

The fact is that we do need to raise taxes to have decent public services, especially after 15 years of the Tories squeezing the public sector

The question is where those taxes should fall. The ridiculously histrionic reaction to the winter fuel payment shows how difficult this is.

I do think this government has not shown the leadership it should have done - they should have gone a lot further and scrapped the triple lock on pensions but they didn't have the guts.

@MyNameIsX Similarly, with the proposed change to ISA’s - irrespective of whether its the right investment decision for the investor and/or offers the best returns.

I didn't see anything in the proposals suggesting she was limiting S&S ISAs to be UK only equities.

Abolishing the triple lock would be electoral suicide and make the WFA appear akin to a chimpanzee’s tea party, as you infer.

Labour know this, of course.

Yeah but the alternative is basically slow decline of our public services .. but I guess that's what the British public deserves at this point..

She didn’t, but when you invest in an equities ISA, the fund may well have exposure to UK equities, of course. Reeves plans to compel these funds to invest a certain percentage in UK investments.

The ISA is merely the wrapper, as you know.

Yes this !!

Why?

UK productivity is comparatively weak.

She didn't say she didn't understand.

I think we pay more taxes than usa don’t we ? Probably less than Europe such as NL though

Err where did Reeves say this? Can you point to the speech where she announced the reduction in Cash ISA amounts?

As i understand it, it was based on "Leaked Treasury reports"

So a scare story.

She hasn't lied, she's just presented one reason for the idea that she thinks will most appeal to people. I don't know that she's denied the potential benefits to the economy has she? Why would she? There's nothing wrong or shameful about her as chancellor wanting to introduce strategies to grow the economy is there? That would benefit us all if that were to happen.

For long-term savings most people would be better off using stocks and shares ISAs, and people stamping their feet and saying, 'But I'm risk averse, how dare the government try to encourage me to do something that will most likely benefit both me as an individual and the country as a whole?' doesn't change that.

We have a family friend who tries to make out I'm some kind of over-privileged money-bags because she found out through our dc that mine have thousands in their trust fund and hers have around £350 each as she didn't put them in stocks and shares ISAs, despite the government leaflet advising that course of action because 'when you're poor you can't take any risks with money.' Bullshit. She's from the same kind of background as me and had access to the same info as me when she chose to out hers in the building society and wasn't in a position to add to it. Some people take great offence at being given any advice or information that doesn't fit into their existing world view and seem to get very angry about it, with the word patronising being very over-used in these situations. See also Brexit for the dangers of this attitude.

@MyNameIsX Did you feel your money was safe in the UK economy during the last government's tenure, under Truss?

You know, and we all know, Labour have a habit of ‘testing’ proposed policies with the public and markets, before firming them up.

Reeves u-turned on her proposed ISA reforms following a backlash.

How do you think lending banks felt about her plans???

You are conflating the mooted idea for the mega pension funds for local government schemes and the treatment of ISAs.

You would still be able to purchase just the S&P500 if you were so inclined.