Torsten Bell, a recently selected Labour candidate for Swansea West, has deleted a controversial social media post advocating for a cap on Individual Savings Accounts (ISAs).
The deletion has sparked concerns about potential new taxes on savings under a future Labour government.
Bell, formerly the head of the Resolution Foundation think tank, had shared a report on savings last January, suggesting that ISAs primarily benefit wealthier individuals. “They work for the top,” he posted on X.
He criticized the government’s savings policy, claiming it does little for those on low or middle incomes while disproportionately benefiting the wealthy.
Bell proposed that “at a minimum we should be capping total ISA savings at £100k.”
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This post has since been deleted.
Currently, ISAs allow individuals to save up to £20,000 per year tax-free, with no upper savings limit.
A briefing note on ISAs, seen exclusively by GB News and produced by the TaxPayers’ Alliance (TPA), highlighted that in 2020-21, over 40 percent of adults had an ISA.
The TPA’s findings suggest significant future value for these accounts: investing £20,000 in a stocks and shares ISA with an additional £20,000 each year could grow to £312,699 after 10 years and £1,094,743 after 20 years at expected return rates.
The TPA warns that under Bell’s proposed £100,000 tax-free cap, combined with a £3,000 capital gains tax-free allowance and £20,000 maximum annual deposit limit, a total of £138,349 could be paid in capital gains tax if one were to withdraw from an ISA after 20 years.
“Taxpayers will be concerned that proposals to tax ISAs are edging closer to power,” said Darwin Friend, Head of Research at the TaxPayers’ Alliance.
“With the tax burden already set to reach an 80-year high, Brits will feel ripped off that one of the few tax-free tools they have could be removed.
The new government needs to maintain the current status of ISAs and take action to reverse the record tax burden.”
The Labour Party has yet to comment on the issue. The controversy around Bell’s past statements and the potential implications for ISA savers could become a significant talking point as the next election approaches, highlighting the broader debate over taxation and savings policy in the UK.
