Latest news with #taxfree
Daily Mail
2 days ago
- Business
- Daily Mail
Savers rush to cash stuff their Isas with a record £14bn pouring into tax-free accounts in just one month
Savers deposited a record amount in cash Isas during April as rumours swirl of a possible cut to tax-free allowances for cash Some £14billion was placed in cash Isas during the period, the highest figure for any month since Isas were introduced in 1999, according to data from the Bank of England. Rachel Reeves is set to launch a review of the Isa market within weeks, with the Treasury preparing a consultation with City firms on possible Isa reforms. These possible reforms come as the Government looks to 'boost the culture of retail investment' and push savers away from holding large sums of cash. And with that warning, it seems Britons are taking advantage of being able to max out the cash element of Isas for potentially one last time by stuffing as much as possible into the tax-free accounts. Laura Suter, director of personal finance at AJ Bell, said: 'Reports the Chancellor is considering cutting the cash Isa allowance have created a sense of scarcity, creating a 'use it or lose it' mentality among consumers. 'The threat of a cut to the allowance is likely to be a spur to action for many, especially given the relentlessly rising tax tide.' However, Mark Hicks, head of active savings at Hargreaves Lansdown said the figure is likely partly as a result of the end of the tax year, as savers shift their money from taxable accounts into Isa wrappers to make use of their refreshed allowance. He said: 'The level of withdrawals from easy access savings seems to indicate a significant proportion of Isa savings has come from people withdrawing from savings and ploughing the money into their Isa equivalents at either end of the tax year, to take advantage of the tax saving.' Rumoured cuts to the cash Isa allowance first emerged earlier this year after city bosses lobbied the Chancellor to cut allowances to just £4,000. In February savers ploughed £3.6billion into their cash Isas following the news. No changes to allowances were announced in the Spring Statement, but it was revealed the Treasury would consider reforms to the allowances in order to 'get the balance right' between cash and investments. Suter added: 'Encouraging more people to invest for the long term is a laudable and sensible aim, not just to boost the economy but to help people leverage the power of the stock market to meet their long-term financial goals. 'But the Government should look beyond cutting the cash Isa allowance, which is unlikely to do anything to change people's attitude to investing.' The investment platform warned that just a fifth of savers would invest more money into the UK stock market if the Government cut cash allowances, with more than half expected to simply move their money to taxable savings accounts instead. However, AJ Bell says the savings push may also have been a result of higher interest rates over recent months.
NHK
6 days ago
- Business
- NHK
LDP lawmakers to propose abolishing tax-free shopping for overseas visitors
A group of lawmakers from Japan's ruling Liberal Democratic Party says it has come up with a proposal that includes abolishing, in principle, the tax-free shopping system for foreign visitors. Under the current system, eligible foreign tourists can purchase items at duty-free shops in Japan without paying consumption tax. But it is pointed out that there have been many cases where visitors are buying a large amount of duty-free items and reselling them to gain illegal profits. An LDP study group initiated by Supreme advisor Aso Taro basically approved the draft plan on Thursday calling for the abolition of the tax exemption system. The draft is raising doubts about whether the government can gain the public's understanding for supporting sales of luxury brand items to foreign tourists through the tax system. But the group also notes that regional development needs to be supported. It calls for preferential measures for duty-free shops at regional airports and ports that sell specialty products such as sake to overseas visitors who have completed their departure procedures. The group says it will submit its proposal to the LDP's Research Commission on the Tax System for discussions on tax reform in fiscal 2026.
Daily Mail
27-05-2025
- Business
- Daily Mail
Chip boosts its easy-access cash Isa to pump it up the best buy tables - is it worth opening?
Products featured in this article are independently selected by This is Money's specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. Chip has boosted its easy-access cash Isa rate to 4.99 per cent as the competition to offer the best buy tax-free deal heats up once more. The app-based provider has added a 12-month bonus to its easy-access cash Isa* of 0.93 per cent, boosting the overall rate to 4.99 per cent. The new rate is available to This is Money readers who download the Chip app and open an easy-access Isa through the app. New customers must enter the code PROMOBOOST when prompted in the app. The boosted rate means there is yet another reshuffle at the top of the Isa best buy tables, with Chip's deal now the best rate for an easy-access Isa with a 12-month bonus added. It has overtaken Plum's* 4.98 per cent easy-access Isa deal, which was previously the best rate for an easy-access Isa with a 12-month bonus. Chip's easy-access Isa has the added feature of being flexible, something Plum's easy-access Isa deal not have. This feature allows savers to deposit and withdraw their money without affecting their Isa allowance. Savers can replace any money they withdraw from their Isa without it counting towards their yearly Isa allowance, as long as they replace the money in the same tax year. Not all providers have this feature meaning funds withdrawn lose their tax-free status and will be taken off the allowance. Once the bonus rate wears off after 12 months, Chip's revert rate is 4.06 per cent, far than Plum's revert rate of 3.29 per cent. Customers who transfer an existing Isa to Plum's easy-access deal will also get a lower rate of 3.29 per cent. Plum's Isa also limits withdrawals to four withdrawals in a 12-month period. The rate will drop to 3.29 per cent if more than four withdrawals are made over 12 months. There are higher Isa rates available than both of these deals. Most contain bonus rates which drop off after three months. CMC invest's easy-access Isa* is still the best overall deal. It offers 5.7 per cent with a three month bonus rate of 0.85 per cent. After this the revert rate is 5.06 per cent. The Isa is fully flexible and does not have withdrawal restrictions. Moneybox is offering the best headline rate for an easy-access Isa of 5.71 per cent with a 1.51 per cent bonus rate for three months. After this the rate is 4.2 per cent. It allows three free withdrawals over 12 months, but if a fourth withdrawal is made the rate drops to just 0.75 per cent for the rest of the 12 months. Trading 212's easy-access Isa deal* pays 4.86 per cent to new customers. This rate includes a 0.76 per cent bonus rate for 12 months. After this the rate reverts to 4.1 per cent, which is the rate existing customers receive. The Isa is flexible and does not have withdrawal restrictions. What's in the fine print of Chip's deal? Chip is an app-based provider so any savings accounts opened with it can only be opened through its app, including its easy-access cash Isa. The easy-access cash Isa can be opened with deposits from £1 as often as you like. The interest is earned daily and paid monthly on the fourth working day of each month. All money deposited in Chip's easy-access Isa deal is held by ClearBank, and is eligible for Financial Services Compensation Scheme protection of up to £85,000 per person. This FSCS protection means savers' cash is protected up to £85,000 per person if the firm fails.
Bloomberg
20-05-2025
- Business
- Bloomberg
UK Considers Reducing Cash Portion of £20,000 ISA Allowance
The UK government is planning to reduce the amount of cash that savers can put in tax-free accounts, according to a Treasury minister. Britons can currently add as much as £20,000 ($26,724) a year to Individual Savings Accounts, choosing whether to keep it as cash, investments or a blend of the two.
Daily Mail
20-05-2025
- Business
- Daily Mail
Chancellor says Isa allowance WON'T be cut from £20,000 but door left open for changes to cash Isas
The annual tax-free Isa allowance will not be cut from £20,000 but the door is open for changes to the cash version, comments from the Chancellor suggest. Rachel Reeves said in an interview with the BBC Newscast Podcast, she said: 'I'm not going to reduce the limit of what people can put in Isas' 'I absolutely want to preserve that £20,000 tax-free investment that people can make every year.' However, the Chancellor stopped short of ruling out any changes to cash Isas, which have been the subject of intense debate since the start of this year. Rachel Reeves said: 'I do want people to get better returns on their savings whether that is a pension or their everyday savings... at the moment a lot of money is put into cash or bonds when it could be invested in equities or stock markets and earn a better return from it.' The Chancellor is expected to launch a consultation to gain views across the City of London into how the Isa market could be reformed. It is thought the Chancellor's Mansion House speech in July could be used to launch the Isa consultation. The Government hinted at at radical shake-up of Isas in the Treasury's Spring Statement document. At the time, the Government said it wanted to 'get the balance right between cash and equities to earn better returns for savers' and 'boost the culture of retail investment'. Currently, Britons have an annual £20,000 tax-free allowance and they can choose to have a stocks and shares version, a cash version, or split between the two as they see fit. But rumours have persisted in recent months that the cash element could be cut to as low as £4,000 a year to push more people into investing. Financal experts have suggested reforms could include merging cash Isas and stocks and shares Isas into one or reducing the amount of money that can be put in cash Isas. Many senior figures from the UK investment industry, including platforms and asset managers, have said that any changes to a cash Isas - such as limiting the amount of money which can be saved in them - will not help to boost investment into the UK. An insider at an event held yesterday between Emma Reynolds, Economic Secretary to the Treasury, and senior investment figures said there has been a mixed reaction towards reducing what people can put in cash. The general consensus was that reducing the amount that can be saved into cash isn't the right move - although, a handful of investment firms are pro cutting the allowance. Cash Isas are the most widely held of the four main Isa products, which also includes stocks and shares Isas, Lifetime Isas and the Innovative Finance Isa. Around £300billion is currently kept in cash Isas and, of this, around £100billion is held by those with £20,000 or more in cash Isa, according to analysis of HMRC figures by stockbroker AJ Bell.
