State pensioners who have less than £20,000 in savings must act before tomorrow
State pensioners have been warned over their money ahead of a planned ISA change from the Labour Party government in the Budget this week. Pensioners have been warned over a potential rule shake-up from Chancellor Rachel Reeves - with people urged to make the most of their cash and stash their money away before tomorrow.
Experts have pointed out, over the years, the annual ISA allowance has only ever been increased. It started at £7,000 in 1999, then went up to £7,200 in 2008 and £10,200 in 2011, then to £15,000 in 2014 and finally in 2017 to £20,000, where it has remained.
There has never been a limit on the value a saver’s ISAs can reach in a lifetime or on the amount that can be contributed over a lifetime. Last year the Resolution Foundation, a research organisation that seeks to improve living standards for those on low and middle incomes, called for a lifetime cap on ISA savings of £100,000.
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Hargreaves Lansdown's Sarah Coles, Head of Personal Finance, said: “It’s worth noting that last year the Resolution Foundation, a research organisation that seeks to improve living standards for those on low and middle incomes, called for a lifetime cap on ISA savings of £100,000.
“Whatever happens in the Budget, now could be a good time to secure this year’s ISA allowance. Anything you’ve already paid in, or you pay in today, will be sheltered from UK income and capital gains tax.” A number of years ago Ms Reeves herself called for a lifetime limit on ISA savings of £500,000.
In an article in the Independent on Sunday she wrote: "Let's introduce a lifetime allowance of £500,000 for ISA investments.' She also implied that she regarded the annual allowance as generous, writing that 'the increase in the ISA limit from £7,000 to £15,000 over the past decade has only helped those who can save big sums of money every year... [let's] freeze the annual limit at £15,000 for the remainder of this parliament."
Currently, savers and investors can contribute up to £20,000 annually to ISAs without paying tax on the returns. Over a quarter of a million people have at least £250,000 in their ISA, with 30,000 savers holding between £500,000 and £750,000.