best maxi ias-confused

hollydays

i want to take out 2 maxi isas, one now and one in april.Ive been told theres no point me having a cash isa as in a non tax payer.Im confused, .how do i work out who to go with to find the best maxi isa as the comparison tables ive seen are for cash isas

Debt_Free_Chick

Cash ISAs are easy to compare, as there are no charges and just a simple interest rate - like any other savings account.

A maxi-ISA is more difficult to compare as it's essentially a tax-wrapper for different investments. How well it performs (i.e. how much it grows each year) depends on the which investments you choose ..... and there are 1,000s to choose from! Also, investments tend to carry charges .... if you use funds, there'll be an annual management charge and possibly an up-front charge too. If you use shares, there will be the cost of buying and selling different shares.

Ive been told theres no point me having a cash isa as in a non tax payer.Im confused

This may or may not be true .... it depends on whether the interest rate in a cash ISA is more or less than the (gross) interest rate you would get in a non-ISA savings account. In either case, you simply need to look at the interest rate quoted (the "AER") and go with whichever is the best. If you can get a better rate of interest in a non-ISA savings account, then that's the one you choose.

HTH

cheerfulcat

hollydays wrote:

i want to take out 2 maxi isas, one now and one in april.Ive been told theres no point me having a cash isa as in a non tax payer.Im confused, .how do i work out who to go with to find the best maxi isa as the comparison tables ive seen are for cash isas

Hello, hollydays,

What the *best* fund would have been ( the ISA part is only the wrapper ) is only known with hindsight! There is a short free course at Incademy explaining ISAs and how to choose a fund here. The course is over 19 pages - you can navigate through the numbers at the top or the drop down box at the bottom.

Bear in mind that stocks and shares ISAs do not carry any sort of guarantee and that you can lose money. On the other hand, the returns from stockmarket investments *over the long term* have outperformed cash by a good margin.

I would be very wary of the advice that as a non tax payer it's not worth having a cash ISA, btw. I didn't fully use my PEP and TESSA allowances because of advice like that and am pretty annoyed with myself now for listening to it! You never know when you might become a taxpayer, for whatever reason.

HTH

Cheerfulcat

EdInvestor

cheerfulcat wrote:

I would be very wary of the advice that as a non tax payer it's not worth having a cash ISA, btw. I didn't fully use my PEP and TESSA allowances because of advice like that and am pretty annoyed with myself now for listening to it! You never know when you might become a taxpayer, for whatever reason.

Quite right.

One reason is that you might end up with a state pension on retirement, which will eat up most of your personal allowance for a start. IMHO you should always use ISA allowance as much as you can every year.

Re the maxi ISA, IMHO it's better to approach this question the other way round and ask yourself what you want to invest in.

The choice is basically:

1.Shares, either individually or in funds of various kinds which carry various risk levels from low/medium to very high
2.Commercial property, regarded as fairly low risk
3.Bonds and gilts, low to medium risk
4.Commodities (the funds invest in gold, oil, that sort of thing) medium to high risk

Once you have decided on a category then you can look at what's available.

dunstonh

A non tax payer may not benefit from the tax free status of Cash ISAs now but the Cash ISA rates tend to be more favourable than normal savings accounts. Plus, you may not be a tax payer now but what about in the future? Things can change.