Wednesday, February 3, 2010

Is there no end to what the thieving g*ts will try?

Banks pocket Isa tax breaks

Some of Britain’s leading banks and building societies are paying such miserly rates on easy-access Isas that savers would be better off in taxed accounts.

Posted by mr g @ 02:08 PM (772 views)
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5 thoughts on “Is there no end to what the thieving g*ts will try?

  • mark wadsworth says:

    Exactly! I was mulling this earlier. The Home-Owner-Ists try and justify their economic model by saying “We are responsible and worthy citizens. We encourage saving and investing. Buying a house is saving and investing” (when quite clearly the reverse is true).

    So to cover their traces, the Home-Owner-Ists call for “tax breaks for savers” – however because of the way that markets work, the interest rate on ISA accounts adjust downwards to soak up some, all or even more of the supposed value of the tax break.

    Ergo, the overall interest that banks pay goes DOWN, ergo, the interest rates that they charge on mortgages GOES DOWN, ergo “tax breaks for saving” are in fact yet another taxpayer-subsidy for mortgage borrowers.

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  • You paint a twisted picture there Mark, but unfortunately I cannot pick fault with what you say. It will be interesting to see how far the ISA war rages in the up coming ISA season. So far the best rate on offer without ties is around 3%. What was the inflation figure again? Do’h.

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  • I would put it more simply. The banks are carrying on with their task of transferring our wealth to themselves, or to be even more precise, the bankers at the top.

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  • Remember the gov promising that they were going to find ways to compensate savers for loss of bank interest?
    And what did they do? They increased the yearly amount you could stash in an ISA.
    Yeah, that really helped, given the paltry interest rates on ISAs, as the article points out.
    Those of us who check the net can get the better deals, but there must be thousands of people like my Mum who don’t realise just how little their ISA is paying. I checked hers last Nov and she was flabbergasted to find it was earning 0.25%. I found the best ISA deal for her but when she went to the bank to change it they talked her into taking a 4-year bond at 4.75% pa!

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  • Inflation Is Inevitable says:

    Well in the short term at least we can put more money into our stocks and shares isa (I’d invest in oil companies, at least we can rely on opec to fix prices through supply restrictions and prevent significant losses), even if they bomb they will be back up again, other markets I’m not so sure. (We won’t stop needing energy and food and these days they are worryingly interconnected.)

    Maybe they are getting ready for when £10200 is only worth what £7200 used to be, oh I guess that’s pretty much happened, but more to come.

    If we take our cash out of banks we can hurt them, and the housing market at the same time. The banks will have to raise rates to win back savers. Smaller building societies are already having to do this.

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