For those of us in the UK, it looks like storing cash in the Stocks and Shares ISA is not going to be an option any longer as it will now attract a charge when the rules change.
Does seem a little unfair I think.
On Cash ISAs
Cash ISAs are a safe way for people who do not want to take risks to keep their money earning tax free, to reduce it by such a large amount seems short sighted, most people will not suddenly now start investing as they do not want the risk, the cash will be removed from the eco system and people will just leave it in non interest earning accounts.
Regarding stocks and shares ISA and holding cash inside is if I have a dividend paying stock inside my ISA it will pay me that dividend then would I have to remove that cash myself straight away from the ISA? Micro managing all dividend payments into the ISA? Not sure how that would work. Thank goodness it’s a while away this rule.
Re: cash ISA, yeah small change and won’t encourage investment I think but not really impacting much so no big deal
It would be incredibly difficult for everyone to monitor their dividends and transfer any payments out straight away to avoid this proposed extra charge. Also, what happens when I deposit money waiting for a stock to hit a certain price before I buy, it could be sitting there for days, does that attract a surcharge?
As for “it doesn’t impact me much” there are many 1000s who it does effect. So it’s not all about you.
I mean yes people use cash ISA but the restriction to 8k will only affect a small portion of the population who put over 8k into a cash ISA so that is why I said it was not much impact in general.