A couple of articles in the press this week reported on a paper from the Office of Tax Simplification (OTF) published on 25th May this year, that looks at how complex the UK savings tax system has become.
For example, there are more types of ISA than ever before, all with different rules – and the introduction of the Personal Savings Allowance has made the decision about whether savers should even bother with a cash ISA even more difficult.
According to The Times on Saturday “Plans are afoot for a radical overhaul of individual savings accounts, including removing the limit on the number that can be opened each year”.
There are lots of other suggestions too, including removing the ban on partial transfers of ISAs that have been opened in the current tax year and reviewing the rules on withdrawals on the Lifetime ISA. The report extends beyond cash savings accounts into dividend income on investments, plus the taxation on pension withdrawals and life insurance bonds amongst other things. For a bit more information about this OTS paper, read our article Complicated ISA rules to be reviewed.
Hoorah for common sense at last – as we know, sometimes too much choice and complex rules mean that we do nothing for fear of making the wrong decision. That is not how it should be – these tax efficient vehicles should be used where appropriate, so it shouldn’t be so complicated.
Talking of ISAs Sylvia Morris reminded us all in this week’s Daily Mail that it’s just as important, if not more so, to review your cash ISAs, in order to boost the rate of your old accounts. Some cash ISAs rates are as low as 0.20%, so far better rates can be found elsewhere. Check out our best buy tables.
Going back to the ongoing question of ‘will they or won’t they’, there is still, as expected, some bad news and some good news about the future of the economy that makes it all but impossible to be at all confident about if and when a base rate rise will happen this year.
On the one hand while some economists had believed that the growth rate of 0.1% would be revised higher as more data became available, that wasn’t the case as the Office for National Statistics (ONS) has confirmed that first-quarter GDP growth was the worst for five years.
However, according to an index of economic indicators by experts at Goldman Sachs, Britain’s economy is ‘surging ahead’, rebounding rapidly from a slow start to the year. They estimate that GDP growth could hit 0.5% in the second quarter. If this is the case, once again we’re being told that this should pave the way for an interest rate hike – it is now being predicted that the first of a few rises will happen in November this year, with a further couple to follow over the next three years.
In The Sunday Times, there was an article looking at Sharia-compliant lenders. Our recent article Sharia Compliant Savings, explains what Sharia compliant means and why these savings accounts shouldn’t be ignored.
Did you know that all four of Northern Ireland’s banks print their own money – a tradition that dates back to the 19th century.
Well I didn’t, but Ulster Bank has revealed that in a step towards following the Bank of England by printing plastic money, therefore replacing its paper currency, it will be circulating the UK’s first vertical £5 and £10 polymer bank notes, next year. They can be used in all parts of the UK although retailers outside Northern Ireland will not be obliged to accept them.
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