The UK Budget Made Some Big ISA Changes

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[boosthit]

The capital gains tax of 24% is outrageous and the tiny allowance of 3k is ridiculous. Government really doesn't want people to get ahead

[neilgriffin]

Absolutely. I sold my houses in 2018, bit early. Moved our money into ISAs for me and the 2 kids, max them out every year. And pumping more into our pensions. Best move we ever made.

[MechanicCompetence]

What you have spotted there with the goverments expected ISA income through the inflation hitting the ISA limits is actually genius. Thank you so much Toby!

I wasn't too fussed that they were holding it at £20, 000. I actually thought "Oh good!" and I now realise it isn't as good as it initially sounds haha

[lewisgreenard]

"If youre saving 20000 of that then you must be living in ur childhood bedroom with all your bills paid" that's me on track to max out my isa this year at 21

[AndySmartInvesting]

The statistic that fewer than 4 million adults in the UK hold Stocks & Shares ISAs never ceases to amaze me. Imagine if our education system provided us with the kind of financial insights you so excellently share. If everyone began investing regularly from 18, using tax-efficient accounts like the Stocks & Shares ISA, the long-term growth could be transformative, even creating significant financial safety nets long term.

That level of financial security could empower more people to step away from traditional 9-5 jobs and invest in themselves, potentially starting businesses that go on to create jobs, support others to invest from their salary, stimulate the economy, and increase government revenues through business taxes. It’s obviously not always as straightforward as that, but it feels like a real disservice to the next generation if we don’t embed this knowledge into formal education. I know I'm preaching to the choir here but I'm still shocked.

Great video as always Toby! 😃

[nax]

the government still thinks UK is a 5 star hotel offering premium financial benefits to investors and savers, when in fact it's a room in a hostel that doesn't offer late checkout that you have to share with 5 other people. now i understand why british people dream of leaving the UK.

[GGUO]

Also, ISAs retain their tax-free status for 3 years and 1 day after someone dies. Which is useful if probate / distribution of assets takes a long time.

[barbarianlife]

I would never get into property these days. I can understand it in previous decades. Stocks and Shares ISA is such a gift and the best alternative.

[briancalvey]

I have invested in both ISAs and Pensions over the last 40 years.They have Both done very well but the ISA is the absolute winner by a country mile. The ISA also has flexibility where the Pension is a Straight Jacket. You can take out of an ISA as much as you want or need anytime that suits you, and if you wish you can put it back into the ISA before the end of THE TAX YEAR without losing the tax free element. In short you can use the ISA as a Bank account, with a little manoeuvring.(DYOR). If this budget proposal goes through in 2027 you could end up paying 67% of the total in Tax, Less your 25% tax free entitlement .Pensions are extremely messy and ISAs are extremely simple.
Also if you can choose your own fruit and veg in life you can choose your own shares - its easy and far, far more profitable in the long run.

[Lovedogs-im]

i have invested in ISA for 22 yrs. every year i try to use the max allowed. i would recommend it. and the interest is tax free.

[michaelq]

there is nothing stopping the government changing rules in the future and deciding to tax what is in your ISA...always be nimble

[james]

This advice is gold, thank you Toby. As are ISA, one of the few remaining ways to build wealth in the UK.

[Richard-fmcx]

While you do lose your allowance if you don’t use it the introduction of flexible ISAs enables money to be withdrawn and put back in with no penalty as long as you do it within the same financial year. It does require you having the cash, but I have done this for a few years now and managed to roll over my allowances, but still use the cash for other purposes. I make sure my ISA is fully funded by 5th April each year, and then if it is not being invested withdraw it and use it to offset against my mortgage. As my mortgage comes down more and more gets funnelled into my ISA, using the allowances I rolled over. I find this quite an effective strategy.

[chunderground]

Agreed 100% sound advice S&P 500 tracker in an isa wrapper is a no brainer

[makalu]

We are being legally robbed from every angle - the average PAYE individual has zero chance of becoming financially free.

[brysoga]

This is exactly my plan. I am investing in 3 distinct retirement pots. 1) ISA, 2) pension and 3) other stocks and shares. I'm hoping to retire in 15 years with enough in pot 3 to last for about 10 years. I also intend on withdrawing my ISA allowance from pot 2 every year to maintain ISA contributions. Which should end up being largely tax free (25% plus 12k income allowance). Then when pot 3 has been exhausted (10 years) I plan to move to withdrawing from pot 2 and again will aim for it to last another 10 years. I'm hoping that with 25 years of growth from today it will be enough to provide a good living standard even after paying income tax. Then when that has been depleted I will live off my state pension and my ISA which should have seen 35 years of contributions and growth. So really ought to be plenty money for an 80 year old, and I should be completely exempt from having to pay any tax at all.

Furthermore this plan will protect my spouse, if I die at any point she will inherit everything, there's no annuity that dies with me. Just a well crafted plan that she can continue to execute if and when I am gone.

[richardwong]

There are no VAT or capital gains tax in Hong Kong. Employment tax in Hong Kong (after allowable deductions and personal allowances) starts at 2% rising to a maximum of 17%. Those tax rates make us weep when compared with those in the UK.

[ys]

Thankyou this is great advice. I already have a stocks and shares Isa. It's never to late to start saving for your future.

[unichromeirl]

I was late to a s&s isa because i didnt know about them. Recently I have began priorising a sipp now with a bit in the isa, although being able to withdraw from an isa when i want is a major benefit.

I wish i had started a long time ago but glad to have at least started back in 2022 with the isa.

I'm really glad the government didnt mess around with the tax on them for now.

[sheilagibson]

These politicians must be removed from office!