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Money to invest...

Discussion in 'Personal' started by Marshall, Dec 7, 2019.

  1. magic surf bus

    magic surf bus Star commenter

    The first £1000 of any savings interest isn't subject to income tax, so, assuming a 1.5% interest rate, You'd need more than £65,000(ish) in savings before an ISA was worth bothering with.

    Put more simpy, if the best interest rate you can get is 1% you'll need over £100,000 in savings before the tax advantage of an ISA comes into play. Then you'll only gain if the ISA interest rate is above 0.8%. It's all a bloody silly game isn't it? One thing's for certain - the bankers aren't getting any poorer.
    Last edited: Dec 7, 2019
    lindenlea likes this.
  2. lanokia

    lanokia Star commenter

    Wouldn't be very good bankers if they were.
    smoothnewt and minnie me like this.
  3. jubilee

    jubilee Star commenter

    True, but that allowance on savings interest is very recent and may not be long-term. Money saved and kept in an ISA will stay tax free.
  4. LondonCanary

    LondonCanary Star commenter

    Although legal, most people disapprove of tax avoidance. This has been touched on in many threads.
  5. Over_the_hill

    Over_the_hill Star commenter

    My parents bought some shares for my children when they were born, they were doing quite well until the last 6-9 months when the value has really dipped. I’m hoping they will recover again once everything settles down but who knows?
  6. lindenlea

    lindenlea Star commenter

    ISAs give an incentive to people to save. That is a positive thing and encourages prudence and self sufficiency for people with reasonable incomes. (Anyone would think I was a tory !) I can't see it as avoidance.
    As @magicsurfbus points out, many people who invest in ISAs wouldn't need to pay tax on their savings interest anyway but does everyone realise this. The fact that they save is good though.
  7. lizziescat

    lizziescat Star commenter

    Official definition of Tax avoidance is, ‘bending the rules of the tax system to gain a tax advantage that Parliament never intended’.
    Eg, investing in a ‘film company’ which does not actually make films with the purpose of gaining the tax relief or being paid by a ‘loan’, which never has to be paid back (recent cases)

    ISAs were intended to encourage saving - hence not tax avoidance
    Sundaytrekker likes this.
  8. maggie m

    maggie m Senior commenter

    Premium bonds can be a good bet . I have made just over 3% this year but of course there are no guarantees . You can get your money back in 7 days if you decide to use it for somethingelse. My sister had a tidy lump sum from voluntary redundancy about 5 years ago. She went to an independent financial adviser who has managed to get it to produce about 5% thus far. She condiders his fee well worth it.
  9. sbkrobson

    sbkrobson Star commenter

    O-I'm sorry-I really did not mean to cause upset.
    I was trying to describe how plenty of readers might feel on reading this thread.
    Of course I may have chosen to say nothing, and I would have done that if I thought it would upset.

    There are haves and have nots. That was my point,and one I frequently raise in various threads. I think it is important.

    Again, I'm sorry if you feel I am accusing you of something-not my intention.
    Sundaytrekker and Marshall like this.
  10. Morninglover

    Morninglover Lead commenter

    Presumably - if we are to follow your line of argument - no poster should also comment about films (not everyone can afford to go to the cinema), or holidays (not everyone can afford them) or even a Tessers meet up(eating out and transport costs!) Etc.
  11. LondonCanary

    LondonCanary Star commenter

    It's not official. It's a definition of agrresive tax avoidances that are likely to be challenged,

    Another definion is, the use of legal methods to modify an individual's financial situation to lower the amount of income tax owed. It's possible to invest money on non-ISA savings and pay the appropriate level of income tax, which most people think is needed to support our public services.
  12. mothorchid

    mothorchid Star commenter

    I'm not sure, @LondonCanary, if the few pounds I might need to pay on taxable interest would help public services much. It would probably cost more to collect and process than it would raise.
    Of course, ISAs have a limit each year, so the amount of tax "lost" from each person is pretty small...
  13. LondonCanary

    LondonCanary Star commenter

    But when you add up those small amounts it comes to £2.8 billion a year.
    (It's not good for inequality either)
  14. mothorchid

    mothorchid Star commenter

    What an extraordinarily large figure.
    That must mean there are trillions of pounds in ISAs, if the interest is about 2% and then the tax is 20% of that 2%. Can I possibly have understood correctly?
  15. Mangleworzle

    Mangleworzle Star commenter

    Most of the money in ISA's is owned by people who put the maximum amount into them each year, currently £20,000. Most of the ISA's held are probably by people who fall well short of the current £1,000 p.a. tax free allowance for savings if the savings weren't in an ISA. ISA's differentially benefit the already wealthy.

    Perhaps there should be a cap on how much in an ISA is tax free and then tax is paid on amounts above that on the basis that the vast majority will never reach the limit and those who do can easily afford to pay the tax on it. Pensions have a life-time contributions limit for instance so there is precedent.
  16. Marshall

    Marshall Star commenter

    sbkrobson - thank you.
    Sundaytrekker and sbkrobson like this.
  17. LondonCanary

    LondonCanary Star commenter

    There is £608 billion invested in ISAs, So using just your numbers £608 billion*2%*20%=£2.4 billion
    HMRC reckon a more accurate accurate number is £2.8 billion.
    mothorchid likes this.
  18. sbkrobson

    sbkrobson Star commenter

    Well tbh I have not really made "an argument"
    I simply find it ill advised to post on a public forum an actual figure of your personal savings.
    There are many reasons, the question of tact being just one.
    It's not an unusual concept-we see it in the workplace too-you don't discuss your salary, for example, precisely in order to avoid negative sentiment around inequalities.

    And so for people who have no savings or prospects of accruing such, no, they don't want to see how much other people have.

    For people who cannot afford to go to the cinema, the suggestion that they cannot abide hearing about other people's cinema trips is not really founded on a basis of how people actually react. I think.

    I know I caused upset to one poster, and I am genuinely sorry for this, but in truth my comment was not directed at querying what to do with savings. It's a perfectly innocuous and useful query. My comment was directed at the small number of people who have posted how much they have in savings. That really surprised me.

    I feel precisely the same way when people post the value of their house, the location of their second home, and a list of the heirloom jewelry they need to insure. I don't think i am alone in that.
    Last edited: Dec 8, 2019
  19. blazer

    blazer Star commenter

    If you are getting 2% on an ISA you are doing well. 0.75% is more the norm at the moment unless you have an old one where they have not dropped the rate.
  20. Morninglover

    Morninglover Lead commenter

    OP never mentioned an amount. So the first line of your post is totally incorrect.

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