Individual Savings Accounts (ISAs) were introduce
in April 1999 and designed to offer a very simple to understand tax free
environment for us all to save into. Well, that was the intention.
Fast forward 17 years (and absurd levels of political
meddling) and I thought the current state of ISAs couldn’t offer a bigger contradiction
to the ‘simple’ concept given that we have Cash ISA, Stocks & Shares ISA,
Junior ISA, Innovative Finance ISA, Flexible ISA and Help To Buy ISA. How wrong
was I……step forward the new Lifetime ISA to be added to the spaghetti ISA soup.
History tells us that when you make something complicated
that is financial or tax related, the masses will be turned off from it. The complication
will defeat the objective. Just look at Pensions as a great example…..the
complicated rules create the disinterest. You have to feel incredibly sorry for
the under 40’s who simply don’t know whether they are coming or going with the
various ISA and Pension options available. At best it is a minefield. At worst
it is an incentive to ignore saving for the long term all together.
In reality, the new Lifetime ISA was a typical
political / Budget shiny headline, not backed up with any reality. There are so
many overlapping schemes for tax exempt savings that I really do question the
motives of W1.
Until there is a clear and simple path, confusion
will continue to reign.
Such an avoidable shame.
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