What to do with ISA?

Stccg

Current situation is:

Got 52k sitting in an A&L cash ISA paying 2.55% currently.
Have an A&L esaver2 account paying 3.14% net
Have a 50k mortgage with A&L (Part n part 40k interest only) - currently at SVR-1.8% = 3.54% (3.5 years to run on discount)

Now at the moment it looks like the thing to do would be to pay the mortgage off but until a month or two ago the interest on the ISA was higher than what I was paying out on the mortgage.

Also, at the moment I woul get more for my dosh by moving it all into the esaver2 account - but without doubt that rate is not going to improve and while its currently better .....once you lose your tax free

Looks like the best cash ISA currently pays out at 3.5-3.6% so a move to a different company may be in order (especailly as I've got other money with A&L and obviously over the 50k recommended limit).

To fill in a few more gaps ..also got a 60k mortgage with Woolwich on a different property at BBR+.74 (life), L&G endowment policy (matures Dec2012 - current worth about 18.5k (target 40k, but won't get past about 24k) and about 12k of ready cash in other accounts (not touching stoks and shares!)

so, what do the experts reckon - pay off the A&L mortgage? Move ISA to a %3+ account or ???????

zerodefect

My first suggestion is that you deposit a maximum of 50K in your A&L cash ISA. If the bank goes under, you are 2K down (you're protected up to 50K).

zerodefect

Others might see it differently, but I reckon that you pay off the 50K mortgage now. Even if you could move your ISA savings, you would be pushed to beat the 3.54% rate seen on the mortgage. In addition, there are suggestions that interest rates are to go down further...

wdyw

I'd say move your ISA to somewhere other than A&L and see what happens in the short term.

Stccg

for the replies - anyone else got a view?