Reeves doesn’t deny plan to slash cash ISA limit

Doodledog

*Norah*, I agree that people should be encouraged to save, but money is not invested in cash ISAs - it is saved, and RR wants to see more investment.

The best way to encourage small savings would be to stop penalising people for doing so by means-testing so much. People who may be able to afford saving least are likely to be hardest hit by means-tests, when they find that their savings push them over thresholds, when not saving would have entitled them to financial help (eg pension credit and associated benefits, free social care and so on).

Doodledog Norah, I agree that people should be encouraged to save, but money is not invested in cash ISAs - it is saved, and RR wants to see more investment.

Yes, word used improperly. RR wants investment, I encourage saving.

Not that anyone cares what I encourage!

Allira

Ps what is this thing you call excess income please, Norah?

Income which people choose not to spend on (my examples) pub meals and coffees out, takeaways, holidays, nails, new gadgets, frequent decoration, new furnishings, new this that.

I've no idea how others save.

Jaxjacky

From £20,000 a year to £4,000 is mentioned, she’s suggesting more retail investment.
Sky news this afternoon

Retail Investment! Is that acronym for shopping and spending?
I'd rather save - thank you Rachel! Given the number of businesses that have gone and are going to the wall - Retail doesn't sound that promising to me but that is only an opinion.

I think retail investment is when you buy the services of a manager, such as is usually the case with a S&S ISA. It's not the same as investing in the Retail sector or shopping.

Norah

Allira

Ps what is this thing you call excess income please, Norah?

Income which people choose not to spend on (my examples) pub meals and coffees out, takeaways, holidays, nails, new gadgets, frequent decoration, new furnishings, new this that.

I've no idea how others save.

Did you read my post?

Assuming that those who don't save are spending excess income on nail bars, coffees out etc is astonishing.

I ask again- what is excess income?

Many people just do not have any income left after the bills are paid, especially when bringing up a family. Obviously you assume anyone who doesn't save is frittering money away on non-essentials.
Many people can't even afford the bills.

Agreed, Allira, which is why lowering the amount that can be made in tax-free interest is (IMO) a fairer idea than increasing taxes on those who are already stretched.

Wyllow3

GrannyGravy13

I wonder if this has any relation to the amount of millionaires made through lottery wins?

No idea on that, GG13, but of course not all ISA's are bought by people from their own earnings - small or large inheritances must feature.

I actually had no idea (yes, naive) that people were salting away so very much money at the top end with tax benefits.

To me, ISA's were really intended for low or modest earners, saving for a deposit, a reasonable rainy day amount for if the roof needs doing, that sort of thing. To being people to saving that had never really previously done it. I had no idea there were ISA millionaires or close to it, and certainly dont approve of them getting the tax breaks when we need to raise money for NHS and so on.

There is something wrong to me to have foodbanks and people getting ISA tax breaks as millionaires.

So once again the person who manages to save just a little, put a pension lump sum aside etc, in case they need to pay for home repairs, perhaps an operation to make their life bearable because NHS waiting lists are years long, is being penalised because of a few wealthy people.

One rule does not fit all, whether they be farmers/wealthy landowners, pensioners not quite managing/wealthy pensioners, small savers/the wealthy.

Allira

Norah

Allira

Ps what is this thing you call excess income please, Norah?

Income which people choose not to spend on (my examples) pub meals and coffees out, takeaways, holidays, nails, new gadgets, frequent decoration, new furnishings, new this that.

I've no idea how others save.

Did you read my post?

Assuming that those who don't save are spending excess income on nail bars, coffees out etc is astonishing.

I ask again- what is excess income?

Many people just do not have any income left after the bills are paid, especially when bringing up a family. Obviously you assume anyone who doesn't save is frittering money away on non-essentials.
Many people can't even afford the bills.

I assumed nothing. Excess is different to circumstance.

People save what they can and will depending on their own needs and preferences. Yes, I gave examples of things people choose to spend, not all my examples were nails or coffee.

Everyone is different. However, fancy nails, pubs, coffee have been debated before as part to living today, for whatever reason.

I understand many people can't even afford bills - quite likely they have no real concern to RR plans regarding ISA changes.

Doodledog

I think retail investment is when you buy the services of a manager, such as is usually the case with a S&S ISA. It's not the same as investing in the Retail sector or shopping.

Yes.

Doodledog

Agreed, Allira, which is why lowering the amount that can be made in tax-free interest is (IMO) a fairer idea than increasing taxes on those who are already stretched.

Nobody suggested increasing taxes on those who were already stretched.

My husband and I saved regularly when working
Partly into Stocks and Shares ISA and partly in to Cash ISA
. When Russia invaded Ukraine 3 years ago , the Stocks and Shares ISA value fell significantly. The higher interest paid on Cash ISA has helped our income recently.

Retail investment is when an individual invests in assets for their own benefit.

Putting money in a cash ISA isn't retail investing,

Putting money into stocks and shares is.

This House of Lords Library paper published 30 January 2025 explains. Begins:

Individual consumers investing in the stock market, known as ‘retail’ investment, can have benefits for individuals and the economy, though it also brings risks. The Financial Conduct Authority estimates that a significant number of people in the UK have cash savings that are depreciating in value and would produce higher returns if invested. Some commentators and thinktanks have argued the government should pursue policies to encourage greater retail investment in the stock market.

This is what the speculation is about.

lordslibrary.parliament.uk/encouraging-retail-investment-in-the-stock-market/#:~:text=the%20stock%20market.-,1.,when%20the%20stocks%20are%20sold.

Allira

Wyllow3

GrannyGravy13

I wonder if this has any relation to the amount of millionaires made through lottery wins?

No idea on that, GG13, but of course not all ISA's are bought by people from their own earnings - small or large inheritances must feature.

I actually had no idea (yes, naive) that people were salting away so very much money at the top end with tax benefits.

To me, ISA's were really intended for low or modest earners, saving for a deposit, a reasonable rainy day amount for if the roof needs doing, that sort of thing. To being people to saving that had never really previously done it. I had no idea there were ISA millionaires or close to it, and certainly dont approve of them getting the tax breaks when we need to raise money for NHS and so on.

There is something wrong to me to have foodbanks and people getting ISA tax breaks as millionaires.

So once again the person who manages to save just a little, put a pension lump sum aside etc, in case they need to pay for home repairs, perhaps an operation to make their life bearable because NHS waiting lists are years long, is being penalised because of a few wealthy people.

One rule does not fit all, whether they be farmers/wealthy landowners, pensioners not quite managing/wealthy pensioners, small savers/the wealthy.

Wouldn’t those who can afford to save just a little still be able to do that if the ISA limit was reduced to £4000 as suggested though, I guess it is people who are better off who save more than that per year at the moment?

I agree Wyllow. If I remember correctly, the whole point of cash ISAs was as an incentive for people of moderate means to save, not to avoid tax on the interest earned on inheritances and pension lump sums. People with large pensions are already subsidised generously by the government when they make the contributions.

Casdon

Allira

Wyllow3

GrannyGravy13

I wonder if this has any relation to the amount of millionaires made through lottery wins?

No idea on that, GG13, but of course not all ISA's are bought by people from their own earnings - small or large inheritances must feature.

I actually had no idea (yes, naive) that people were salting away so very much money at the top end with tax benefits.

To me, ISA's were really intended for low or modest earners, saving for a deposit, a reasonable rainy day amount for if the roof needs doing, that sort of thing. To being people to saving that had never really previously done it. I had no idea there were ISA millionaires or close to it, and certainly dont approve of them getting the tax breaks when we need to raise money for NHS and so on.

There is something wrong to me to have foodbanks and people getting ISA tax breaks as millionaires.

So once again the person who manages to save just a little, put a pension lump sum aside etc, in case they need to pay for home repairs, perhaps an operation to make their life bearable because NHS waiting lists are years long, is being penalised because of a few wealthy people.

One rule does not fit all, whether they be farmers/wealthy landowners, pensioners not quite managing/wealthy pensioners, small savers/the wealthy.

Wouldn’t those who can afford to save just a little still be able to do that if the ISA limit was reduced to £4000 as suggested though, I guess it is people who are better off who save more than that per year at the moment?

People who can save just a little could still have put money into an ISA when the limit was (is) £20,000, though.

What will happen with children's ISAs, I wonder? The limit is £9,000 at the moment, will this be reduced?

Allira

Casdon

Allira

Wyllow3

GrannyGravy13

I wonder if this has any relation to the amount of millionaires made through lottery wins?

No idea on that, GG13, but of course not all ISA's are bought by people from their own earnings - small or large inheritances must feature.

I actually had no idea (yes, naive) that people were salting away so very much money at the top end with tax benefits.

To me, ISA's were really intended for low or modest earners, saving for a deposit, a reasonable rainy day amount for if the roof needs doing, that sort of thing. To being people to saving that had never really previously done it. I had no idea there were ISA millionaires or close to it, and certainly dont approve of them getting the tax breaks when we need to raise money for NHS and so on.

There is something wrong to me to have foodbanks and people getting ISA tax breaks as millionaires.

So once again the person who manages to save just a little, put a pension lump sum aside etc, in case they need to pay for home repairs, perhaps an operation to make their life bearable because NHS waiting lists are years long, is being penalised because of a few wealthy people.

One rule does not fit all, whether they be farmers/wealthy landowners, pensioners not quite managing/wealthy pensioners, small savers/the wealthy.

Wouldn’t those who can afford to save just a little still be able to do that if the ISA limit was reduced to £4000 as suggested though, I guess it is people who are better off who save more than that per year at the moment?

People who can save just a little could still have put money into an ISA when the limit was (is) £20,000, though.

What will happen with children's ISAs, I wonder? The limit is £9,000 at the moment, will this be reduced?

Optimistically, if RR plans to slash cash ISA limits, she'd slash children's ISA limits by the same amount. Perhaps she'll slash as unnecessary?

Optimistically

Really?

Allira

Optimistically

Really?

Yes.

Sorry, Norah, but should children pay tax on savings?

They will not be working so are hardly likely to reach the Personal Allowance level on their savings.

Allira

Sorry, Norah, but should children pay tax on savings?

They will not be working so are hardly likely to reach the Personal Allowance level on their savings.

The limit is under 18, unless I am mistaken.

They surely don't need to save as adults, do they?

🤔

I'm not sure what you mean

Allira

🤔

I'm not sure what you mean

I'm equally confused. Why would not any 'slash' in amounts one could deposit in cash ISAs be done the same to all?

Because children don't (usually) pay income tax anyway.

It seems fairly logical.

Allira

Because children don't (usually) pay income tax anyway.

It seems fairly logical.

Correct, children usually pay no income tax.

No need to save larger amounts than for adults over 18, I'd think.

Well, considering how much university fees are and may be in the future, I thin saving for a child's future should be encouraged. It's not just fees, it's living costs too.

If they don't go to university, perjaps an apprenticeship, low-paid job, house deposit, then that cushion will help them whatever they decide to do if they have one.

Many young people can never afford the deposit for a house now.
.