Martin Lewis, the star of ITV’s The Martin Lewis Money Show and BBC Sounds podcast, has issued a warning to customers of National Savings and Investments (NS&I) following today’s Budget announcement.
He took to Twitter/X to share his thoughts on the new British ISA, which allows an additional £5,000 investment on top of the £20,000 allowance – but only for investing in UK assets.
One X user responded to Mr Lewis’s tweet, asking: “Cool, but how many people have £20k to invest, nevermind £25k…” To which Mr Lewis replied: “Actually a surprisingly large number.”
He also mentioned the upcoming British Saving Bond from NSandI, stating: “British Saving Bond to come from NS&I new three-year fix – the key is what is the rate – it will need to be over five percent to be worth it (unless allowing very large savings, over £85k which is when NSandI being state owned has an extra safety boon)”.
Dominic Thackray, a money expert at MHA Caves Wealth, shared his thoughts: “The Great British ISA If this is in-line with changes Hunt is looking to make for pensions under the Mansion House Compact and requires investments into unlisted companies, would existing Venture Capital Trusts not be better placed?
“VCTs already offer tax free returns, and offer a 30 percent income tax relief on amounts invested, up to a £200,000 a year allowance. As ever, the devil is in the detail until the consultation is complete as to how a ‘UK investment’ is defined, given commercial activities that larger listed companies partake will also be outside of the UK.”
Matthew Carter from Coventry Building Society pointed out: “The move to add an extra £5,000 to benefit those with stocks and shares ISAs means the chancellor has missed an open goal opportunity to increase broader cash ISA limits, and instead, adds further complexity across the ISA range.”, reports Birmingham Live.
He added: “The £20,000 cash ISA limit set back in 2017 is outdated adjusted for inflation, ISA allowance should be £26,400* today. With no change to income tax and no change to cash ISA allowances means millions more people will be paying tax on their non-ISA savings for the first time as rising interest rates use up their Personal Savings Allowance.”
“Frozen income tax thresholds means 3.8 million more people will also be paying higher taxes due to fiscal drag this tax year, and 1.4 million more will see their Personal Savings Allowance cut in half to £500 as they enter the higher tax band.
“Bank of England have held the base rate at 5.25 percent since last August and best buy savings rates are close to this today. This means a higher rate taxpayer earning this rate would start to pay 40 percent tax if they had just over £9,525 in savings. Basic rate taxpayers, including many pensioners in this bracket, would be taxed at 20 percent on balances of £19,050 or more, unless they protect their savings from tax using an ISA.”
