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MSE News: It's a new tax year – so think about using your new ISA allowance

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Former_MSE_Helen
Former_MSE_Helen Posts: 2,382 Forumite
in ISAs & tax-free savings
"The new tax year has just begun meaning every UK over-16 now has a brand new ISA allowance"
Read the full story:

It's a new tax year – so think about using your new ISA allowance

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  • jimjames
    jimjames Posts: 18,674 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    MSE Helen - can you please explain why MSE are constantly hyping cash ISAs when they are clearly not the best place for cash savings for the majority of people who have under £2000 in savings.

    There is no benefit or requirement to "use it or lose it" for anyone with this level of savings - they can easily put that into an ISA any year if rates improve but in the meantime will get a vastly better return using current accounts paying up to 5%.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    It is terrible advice to encourage people to throw their cash into a cash ISA right now. Literally everybody will be able to make more money in current accounts for quite a while.

    The 2014-15 allowance is available until April 5 2015. Perhaps MSE could explain the rush?

    I am amazed that there is no consideration in this article to why people put money aside - is it short term savings, medium term savings, longer term investment? For any short term savings, putting money into a cash ISA is like throwing wads of cash away. 100% incompatible with the MSE ethos that we used to have.

    Also, to completely ignore S&S ISAs is just incredible. MSE doing their readership a huge disfavour by making it sound as if cash ISAs are the holy grail for putting money aside.

    Sadly, some people take MSE as the gospel and will consequently lose money.
  • jimjames
    jimjames Posts: 18,674 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    innovate wrote: »
    It is terrible advice to encourage people to throw their cash into a cash ISA right now. Literally everybody will be able to make more money in current accounts for quite a while.

    I've tried twitter to see if the MSE team decide to respond there - they never bothered with any reply on the previous ISA article and are tweeting the same message out via the MSE and Martin Lewis account. Hopefully they may respond there and give an explanation for why they are doing this - it wouldn't be because they get paid for clicks to the account opening on bank websites would it?
    Remember the saying: if it looks too good to be true it almost certainly is.
  • KTF
    KTF Posts: 4,848 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 7 April 2014 at 5:32PM
    Also:
    Nationwide's new regular saver pays a variable 2.5% AER as long as you deposit between £1 and £1,250 into it each month.
    Is incorrect as there is no requirement to fund it every month after the initial opening deposit which starts at £1.
    There is no requirement to make any deposits into the account after the initial deposit. If you choose to make further deposits into the account, the minimum deposit is £1. The maximum deposit each calendar month is £1,250 until 1 March 2015. From 1 March 2015, the maximum monthly deposit limit will be removed and you can then deposit up to the annual cash ISA allowance.
    Source: http://www.nationwide.co.uk/products/savings/regular-saver-isa/rates-and-information#xtab:important-details

    This is why I think its a good idea to open one with £1 now and then empty the contents of the current accounts, regular savers, etc. into it in March should you still want to fill your ISA allowance for the 14/15 tax year.
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 7 April 2014 at 7:46PM
    KTF wrote: »
    Also:
    Is incorrect as there is no requirement to fund it every month after the initial opening deposit which starts at £1.
    Perhaps they got their information from the rates and information page which seems to suggest an increase in balance (of at least £1) each month is required to earn the 2.5% AER rate?


    If that is true (and I can't find anything else which backs it up), then whilst it won't be a problem in the early months, it could catch a few people out later in the tax year if they've used up the full £15K prior to the beginning of March. Forget that!
  • zerog
    zerog Posts: 2,478 Forumite
    YorkshireBoy wrote: »
    if they've used up the full £15K prior to the beginning of March.

    How would this situation occur?
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    zerog wrote: »
    How would this situation occur?
    The account holder wouldn't be able to increase their balance by £1 in March...and so would forfeit the interest for that month (around £32).


    That's if you do have to increase the balance by at least £1 per month to enjoy 2.5% AER for that month of course...and it's not really clear that you do (normally such a major clause would carry a rather prominent warning...and this one doesn't, yet does mention the "increase in balance" figure).
  • Archi_Bald
    Archi_Bald Posts: 9,681 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    YorkshireBoy wrote: »
    .... if they've used up the full £15K prior to the beginning of March.
    YorkshireBoy wrote: »
    The account holder wouldn't be able to increase their balance by £1 in March...and so would forfeit the interest for that month (around £32).

    If the max is £1,250 a month (which it is), then how would could you exceed your 2014-15 ISA allowance by March 1 2015?
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 7 April 2014 at 7:48PM
    Archi_Bald wrote: »
    If the max is £1,250 a month (which it is), then how would could you exceed your 2014-15 ISA allowance by March 1 2015?
    <slaps forehead> I've been up since 4am. Can I claim tiredness as a valid excuse for my nonsense?


    Apologies to anyone who wasted time trying to understand me!
  • matttye
    matttye Posts: 4,828 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker Debt-free and Proud!
    Some ISAs are great and pay as much as the best current accounts.

    E.g. Nottingham BS has a 4% regular saver ISA - no withdrawals. I appreciate that means you could only earn interest on a balance that increases by a maximum of £1,250 monthly, but might be worth drip-feeding from a current account.

    Or Saffron BS has a 4% regular saver ISA - easy access.
    What will your verse be?

    R.I.P Robin Williams.
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