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Originally Posted by Bex
but you see this is tax free savings. with interest rates going up it means that you earn better interest in normal savings accounts and the higher, longer term, less flexible savings accounts. therefore it doesn't stop people saving but the gov get their share of it.
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And tax free is a good encouragement to do something. Docklands and many other parts of the country were regenerated with Enterprise zone tax breaks.
It also makes a big difference to the end result. For a taxpayer, a 5% gross rate means a 4% tax rate net, for a basic rate taxpayer and 3% net rate for a 40%
So an Isa paying 3.5% is a better investment for anyone, than a standard account paying 5%. An Isa is a pretty flexible savings account, immediate withdrawal, CAT standard 0 charges, the ability to transfer between savings providers.
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Originally Posted by Bex
I see your point, but on retirement, you may have paid off your mortgage but you may not have a regular income to subsidise your living expenses
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But hopefully a pile of capital you can drawdown over your retirement, just no inheretence for your children.