£20k allowance, plus £9k junior allowance. There is no reason at all why a family with two adults & two children should have an annual *tax free* savings allowance of £58,000. - ThreadSky

duncanweldon.bsky.social • 23 days ago

£20k allowance, plus £9k junior allowance.
There is no reason at all why a family with two adults & two children should have an annual *tax free* savings allowance of £58,000.

Comments

jasdevsekhon.bsky.social•23 days ago

Remember that it is still (in theory) post-tax income entering the ISAs.
I’d also like to credit Vanguard for making it easier for me and countless others to invest in a diversified portfolio of low-fee funds within an ISA wrapper.

paulb3964.bsky.social•23 days ago

What proportion of 2 adult + 2 children families would have the resources to make use of that amount of tax free savings allowance in a single year, never mind year on year?

Is there any data on what proportion of individuals make regular full use of their ISA allowance?

tk.gg•23 days ago

There is and it is what you would expect, a massive tax break for those that don't need it.

From https://www.gov.uk/government/statistics/annual-savings-statistics-2024/commentary-for-annual-savings-statistics-september-2024

paulb3964.bsky.social•23 days ago

Not sure how to interpret that chart. Is it telling me that about 10% of those with an income of £0-5000 put £20k into an ISA?

jeremypattison.bsky.social•23 days ago

Yep

tk.gg•23 days ago

This is how much, in the last year, those in different income brackets based on PAYE income only used of their allowance. That's why the chart caps out at 20k.

And shows how small a percentage it is of people hitting the maximum up to higher income brackets.

stylistic.bsky.social•23 days ago

Currently have, rather than put in the current financial year.

widdowquinn.bsky.social•23 days ago

And another wrinkle - they’re proportions, not absolute numbers. There could be 100 or 1,000,000 people on <£5k in that graph and the presentation hides it.

widdowquinn.bsky.social•23 days ago

AFAICT the graph tells us that people on higher incomes tend to have more in savings, and not a lot else.

tendaibsky.bsky.social•23 days ago

I think I agree.

Also compounds the cultural problem that UK just doesn't have an investment ethos. Risk averse saving mentality dominates, thus endemically poor investment levels both by individuals and businesses alike (let alone HMG itself via the Treasury too, but that's another story!).

daviduknorthwest.bsky.social•23 days ago

Wasn’t the £20k introduced by Osborne 2016 then adjusted by Hammond.

alanf.bsky.social•23 days ago

They're saving for a deposit for a house?
Not that I've ever heard of people putting £58k into a cash ISA.
Personally I'm pissed off that if I want to transfer a significant part of my life savings out of a stock ISA I will end up paying tax on much of it.

stevenhseggie.bsky.social•23 days ago

annual 58k seems a lot, here in France we have 23k per person in total in Livret A but that's not per year.

dorienjames.bsky.social•23 days ago

Why? I sell and buy stocks inside my ISA, and take out cash when I need it. No tax involved.

alanf.bsky.social•23 days ago

Because the charges on my current ISA are going up while the service is being reduced.

mev202.bsky.social•23 days ago

Trading212 no fees, if you want, I can give you a referral and we will be be given a free share, you can just sell it if you don't want it. You can have more than one ISA now, so, just stop paying into the one that is costing you, leave it dormant. Set up a new one with no fees.

mccheapo.bsky.social•23 days ago

Never close an ISA, taking the money out and losing the tax protection - move it to another ISA somewhere else instead.

#UKmoney

dorienjames.bsky.social•23 days ago

It’s fairly easy to transfer them while keeping the ISA protection, especially if you get the new provider to pull rather than hoping that the old one will push. I’m very happy with the service and transparent charges at ii. But if they’re the provider you’re struggling with, maybe not.

tobyn.bsky.social•22 days ago

According to HMRC, cost of forgone income & CGT is c£7.8bn pa A big, broad view of British tax https://on.ft.com/3P1IjyS

seanfernyhough.bsky.social•23 days ago

All that dumb money from auto enrolment not enough?

paulchandler.bsky.social•23 days ago

Plus £500 or £1000 for each adult, depending on tax rate.

eekyrich.bsky.social•23 days ago

Plus 500-1000 interest tax free allowance per adult

fromthemorning.bsky.social•23 days ago

Yes plus spousal transfer on death AND 3 years continued protected status after death

robert19pearson.bsky.social•23 days ago

IMO, govt should offer a single account via NS&I that pays 2% tax free (to match its inflation target), with no limit on how much anyone can hold and no restriction on who can have an account

The central bank should pay the same on reserves.

And the Treasury should stop selling gilts

widdowquinn.bsky.social•23 days ago

Speaking as the sort of person you might be trying to nudge into “investment”, if the option wasn’t there for a cash ISA, I’d put my money in a different savings account.

I just don’t have the cash to risk losing on bad investments.

widdowquinn.bsky.social•23 days ago

Even with that “huge” allowance, and assuming a 40% marginal rate on 4% interest with bonuses in full what amount of tax is the exchequer losing here? About £1k per family?

How much do we lose from legal tax avoidance and not taxing Capital Gains? Is that not a better target?

widdowquinn.bsky.social•23 days ago

“With bonuses in full” should be “when used in full”

Not sure autocorrect always helps ;)

widdowquinn.bsky.social•23 days ago

Curious also why the equities market is “dwindling” if it’s such a great investment.

olane.bsky.social•23 days ago

The UK equities markets (I.e. the London stock exchange) are the ones dwindling. You can put equities from anywhere in an ISA.

widdowquinn.bsky.social•23 days ago

I gathered that from the the context of "the City" in the clip.

Weldon seems to be suggesting that, to pick it up, people saving in more secure ways should be gambling their income to prop it up.

I wondered what makes it such a good thing to put your money into if the (City) market is dwindling.

janmanners.bsky.social•23 days ago

Totally agree, another perk for people who can afford to pay more tax.

kentindell.bsky.social•23 days ago

Not sure it makes much practical difference. The tax saved on the interest is pretty thin. And for the very rich, it still isn’t very useful as a tax shelter for a large capital gain.

ewan.thekirks.co.uk•23 days ago

Still, probably costs HMG around £3.5bn a year although that might be good to pay to encourage people to have *some* savings to deal with economic shocks.

But if you're going to give that sort of tax break for saving, it would be good if it were in more productive assets than cash.

zatapatique.bsky.social•23 days ago

yea I was going to respond to the above, the fiscal cost here can best be seen as preventing *more* money from going into property

ewan.thekirks.co.uk•23 days ago

A cheap way of reducing the British disease.

zatapatique.bsky.social•23 days ago

tragically regressive too, but that's because it's laser targeted at the type of saving pots that would totally fuck your housing system even more than they do already

kentindell.bsky.social•23 days ago

When seen from this perspective, removing index linked national savings was an unhelpful way of addressing "put your money into houses to protect against inflation".

zatapatique.bsky.social•23 days ago

because as we know, the housing* investment** primary motive is inflation protection

kentindell.bsky.social•23 days ago

I'm not sure what's driving it beyond British psychology. We all know people who think they must invest in property "because it's safe".

aidan.skinner.me.uk•23 days ago

If it's saving for financial resilience you probably do want it in cash

ewan.thekirks.co.uk•23 days ago

You certainly want liquidity so no PE, VC etc but listed securities are probably ok even with the volatility. Unless your personal crises are correlated to the markets in which case you've probably already got a pretty big portfolio of investments.

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