Some of you have probably seen this reported. The Resolution Foundation think tank is suggesting a tax free limit of £100k for ISAs, estimating ~£1 billion could be raised in taxes if this limit was set.
If you read the article I've linked to, I personally find some of the wording and assumptions by this think tank to be quite offensive. The underlying assertion is the UK, on a wider scale, is not a nation of savers and that current saving schemes are skewed to 'those who already have significant wealth.' They further assert ISA rules are 'heavily skewed towards helping richer households.'
There's too much for me to go into here on what I think about this proposal and the wider assertions this think tank makes. I understand it can be argued if an individual or family can afford to 'put away' £20k per year into an ISA, they're perhaps in a better financial position than many. However do they fall into the bracket of having significant wealth? I suppose it's all relative. I myself wouldn't class holding ~£100k of savings/investments as equating to significant wealth.
The other point I'll make is this. Of course there are people in society that can't save to any meaningful level, and some not at all. However, as we've discussed on here in other threads, surely it also comes down to priorities (for some, I'm not saying everyone before anyone starts!) For example, there will be some people on lower incomes that could be putting something aside each month if they really wanted to. However they'll possibly choose to have 2-3 extra takeaways each month that they don't really need, or to have a tv/broadband package that isn't really required. The same holds true for those on higher incomes who still 'can't save.' Do they need the bigger house, the lease cars replaced every 2-3 years, the expensive holiday, the new kitchen every 5 years etc etc.
My underlying point is this. Many people who don't save could be saving something if they put their mind to it. Also, not everyone that puts money into ISAs holds significant wealth. Many people will sacrifice on other things to put money into an ISA, whether that be £1k, £5k, £10k, £15k or £20k per annum. And the proposal is to tax them for being prudent with their money?
Would be interested in your thoughts on this. Do you agree with the proposal? Do you think £100k savings equates to significant wealth?
www.thisismoney.co.uk
If you read the article I've linked to, I personally find some of the wording and assumptions by this think tank to be quite offensive. The underlying assertion is the UK, on a wider scale, is not a nation of savers and that current saving schemes are skewed to 'those who already have significant wealth.' They further assert ISA rules are 'heavily skewed towards helping richer households.'
There's too much for me to go into here on what I think about this proposal and the wider assertions this think tank makes. I understand it can be argued if an individual or family can afford to 'put away' £20k per year into an ISA, they're perhaps in a better financial position than many. However do they fall into the bracket of having significant wealth? I suppose it's all relative. I myself wouldn't class holding ~£100k of savings/investments as equating to significant wealth.
The other point I'll make is this. Of course there are people in society that can't save to any meaningful level, and some not at all. However, as we've discussed on here in other threads, surely it also comes down to priorities (for some, I'm not saying everyone before anyone starts!) For example, there will be some people on lower incomes that could be putting something aside each month if they really wanted to. However they'll possibly choose to have 2-3 extra takeaways each month that they don't really need, or to have a tv/broadband package that isn't really required. The same holds true for those on higher incomes who still 'can't save.' Do they need the bigger house, the lease cars replaced every 2-3 years, the expensive holiday, the new kitchen every 5 years etc etc.
My underlying point is this. Many people who don't save could be saving something if they put their mind to it. Also, not everyone that puts money into ISAs holds significant wealth. Many people will sacrifice on other things to put money into an ISA, whether that be £1k, £5k, £10k, £15k or £20k per annum. And the proposal is to tax them for being prudent with their money?
Would be interested in your thoughts on this. Do you agree with the proposal? Do you think £100k savings equates to significant wealth?
Hunt urged to cap Isa limit at £100,000 in next Budget
Jeremy Hunt is being urged to dramatically cut how much people can hold in tax-free savings accounts and divert the money to helping those who can't afford to save.
