Dod101 wrote:As one who lives off his dividends , I cannot say I have noticed, but then I have been diligently fully subscribing to my ISA and its predecessors since I retired in 1994. I now have only two or three shares left outside of my ISAs and pay so little tax that I cannot afford to Gift Aid. Government would no doubt say that a husband and wife can put £40,000 a year into tax free ISAs; what more do they want? Dod
If one wanted a retirement income of £30,000 then that would require capital of about £750,000 if a yield of 4% were taken. Putting £20,000 a year into an ISA would take 37.5 years, so you've done well Dod to be so diligent and also you retired a lot longer ago than I did.
In fact, it would have taken over 50 years to put £750,000 into ISAs by now, since the allowance was not raised to £20,000 until 2017 and it was £7,000 stocks & shares plus £3000 cash ISA in 1999. Of course, I have not allowed for capital growth, but most people are not Lord Lees.
In fact many have got much more capital than £750,000 and they are the ones, naturally, who give most to charity. As you say, you "pay so little tax that I cannot afford to Gift Aid". The result is that charities are feeling the pinch.
Of course, there are SIPPs and VCTs, but it just makes the tax system more complex, giving lots of work for tax accountants, and, as I mentioned, lots of extra work for HMRC. No wonder the 'tax book' has got so large.
I've also not mentioned the bizarre way in which capital gains and income tax are connected, so that paying more on one can push you into higher rate tax
.