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 😡

No, what I disagree with is that cash ISA savers can afford to save £20k every year.

Yes - so the point is, if she cuts the yearly allowance to £4k, that will only be detrimental to pretty rich people. Say a couple saves £4k each per year in ISAs from the age of 30-60, that’s £240,000 tax free savings (plus interest of course). That’s quite a lot.

”Crashed the economy”?

The FTSE closed tonight on a record high.

You've zero evidence either she or anyone else in authority said cash ISA's should go, have you?

Its all made up crap, done by people with little better to do with their time.

Plenty can, easily.

The ordinary tax payer then subsidises their tax free savings.

Not necessarily….
You can live in London , save £20 k a year as a couple and still not be able to afford to buy a house while rent is becoming unaffordable…and by a certain age the banks won’t give you a mortgage…so retirement means you’re still paying extortionate rent from your pension …
No one has to live in London, but if that’s where your jobs are , your family are and your kids are at school here then …

It’s all over the news ! You only have to look . Are the BBC and Martin Lewis and the broadsheet newspapers all reciting made up crap? I don’t think so!!

What if said couple can’t afford to buy a family home & need the cash ISAs to save & avoid tax on interest?

What if they can but still can’t afford to buy a family home in London ?

Gilt yields are higher than under Liz Truss. Debt to GDP ratio is highest ever. Food inflation is running at nearly 10%. Unemployment is rising. And top rate taxpayers are leaving the country at an alarming rate.

Yeah, crashed the economy.

Yes but if it’s relatively short term & you really can’t risk losses …

I am to the right politically, dislike reeves, but she's got a point for the following reasons:
1 over time the stock market has always provided greater returns than banks accounts
2 it would stimulate the economy to a small degree
3 the banks provide really crap IS A rates after the first year. Millions of £s are sitting there earning 0.1% interest. People are often financially naive and lazy in moving money. The banks exploit this
4 there are low risk, admittedly, low return stocks and shares investments such as gilts and government bonds. But would still return more over 4 years than a cash IS a
5 stocks and shares IS As are very flexible so you can opt for different levels of risk...for example 10 years ago when I was 45 it was much more adventurous investments than now when I'm retired

the whole aim of IS As or PEPs as they were was.to encourage buying of stocks and shares with a wrap around packaging so that people saved.

What if bond market is down & you lose cash you need quick access to eg for property deposit ?

She is an absolute shit show. She’s screwing up this country try with starmer and his moronic government. And I only foresee it getting worse.

You might be right, but I wouldn’t have thought there would be a lot of people in that position. I don’t live in London though.

As well as the ISA allowance, don’t forget each individual can get up to £1000 interest (basic rate tax payer) or £500 interest (higher rate tax payer) each year tax free.

This is true
it might be better for many to do stocks & bonds but I think people should have choice to put in cash isa if they want for whatever reason , there are some decent interest rates out there for cash ISAs.
I guess the government are just trying to boost economy which is what they should be doing.

They are reporting and commenting on "What if......" same as they did on all the scare stories pre election.

You nor anyone else can point to any announcement made by Reeves on ISA's, no press release, no statement by a junior minister and nothing said by a Civil servant.

All you've got is Hearsay..... & gossip.

BTW Pls don't take this as i don't believe the Govt hasn't looked at all forms of investment and tax breaks given, these should be reviewed regularly, BUT that is not the same as a decision has been made to scrap cash ISA's is it...

As i'm sure you re aware.

I wonder where top rate cash payers are emigrating to for a better life? Dubai? Switzerland? USA? grass isn’t always greener…

She's a moron. Not everyone wants to take risk especially as they get to pension age. We are lucky enough to be able to have 20k spare to put into ISA and yes we do put majority into stocks and shares. But unless you're in the position to be comfortable seeing the up and down swings and accept you could lose a chunk of your money investing in stocks and shares, frankly you would be better off with the safe options which is cash ISA. I've known people committing suicide because of playing stocks during the turbulent times.

So you put £20k in a bank account at 4%. After a year you’ve got £20,800. You pay £320 tax on your £800 interest and you’re still almost £500 up on the year before. You have £20,480 after tax. They’re not taxing the capital. Nobody is taking away their savings.

Please tell me why the UK taxpayer should foot the bill for the tax rather than the person who has made the gains?

Also, assuming this is a person’s only savings account they’d get the first £1k tax free anyway so they’d still pay no tax.

@Notreallyme27 How is the UK tax payer paying tax that was never due in the first place? You mean indirectly? If so then let’s target those people who use Premium Bonds, pensions, giving away £3K a year…I could go on. It’s all perfectly legitimate so I don’t see the problem.

Sadly no single government in my memory hasn't broken a manifesto. The Tories obviously the most as they have been in power the longest.

Yep, that tax not collected just means someone else has to pay more and/or another service gets cut.

"ISA Wrap" is a term used in the financial sector as a means for an investor to avoid all tax on their savings.

In just 5 years a couple will have £200,000 protected from all tax on gains, the cany and wealthy investor has been taken advantage of ISAs for 26 years, albeit at lower allowances prior to 2017.

If thats not bad enough, S&S ISA's are often invested overseas, so the UK tax payer is helping other countries economies.

By the metrics they accused Truss of crashing the economy, they've crashed it twice!!

The country needs to make a choice. Do we want to maintain/inprove existing levels of government spending? If so, we need to increase the tax take - penny on income tax, increase VAT, get rid of triple lock on pensions etc.

Or do we want to cut services - in which case we carry on as we are.

Labour boxed themselves into a corner by promising no increases in the big tax raising levers at the election. By tinkering around the edges they have left businesses and individuals treading water to see what will happen in October.