Isa????

missma

Hi All,

Thinking About Opening A New Isa Account Had Two In Past To Save For A House Deposit, Then I Put Half Money In Investor And Half In Isa Ftse 1oo. I Also Have A Regular Saver Account With Halifax Not Sure If This Money Would Be Better Put Into Isa. Does Anyone Know If There Is A Good Web Site That Shows The Best Isa Rates And Is It Worth Taking Risk On Ftse Isa?

Thanks

dunstonh

You have picked the worst UK index to invest in. The FTSE100 is not diverse enough, all your money is going into large cap and on a crude risk scale of one to ten, you are looking at seven. That makes it higher risk than most people realise (UK stockmarket funds tend to start around five).

cheerfulcat

Hi, missma,

I Also Have A Regular Saver Account With Halifax Not Sure If This Money Would Be Better Put Into Isa.

If you don't intend to use the full Maxi ISA stocks and shares allowance, then it would make sense to put this money into an ISA. According to moneysupermarket.com the Portman is offering a regular savings ISA paying 8% but this is not visible on the Portman's site - worth investigating, anyway.

Does Anyone Know If There Is A Good Web Site That Shows The Best Isa Rates And Is It Worth Taking Risk On Ftse Isa?

A good website for comparing cash mini ISAs ( and other financial products ) is moneysupermarket.com. As to a FTSE [tracker] ISA, I would be reluctant to put a lump sum into one, especially right now, but regular contributions would allow you to take advantage of downward fluctuations. The FTSE 100 is, as dh notes, rather an unwieldy vehicle partly because of the way it's constructed ( top heavy in a few sectors/companies ) but it's still not a bad way to get stock market exposure. A tracker based on the FTSE All-Share, or one each of 100 and FTSE 250, would spread your bets a bit more.

HTH

Cheerfulcat

missma

dunstonh wrote:

You have picked the worst UK index to invest in. The FTSE100 is not diverse enough, all your money is going into large cap and on a crude risk scale of one to ten, you are looking at seven. That makes it higher risk than most people realise (UK stockmarket funds tend to start around five).

Sorry but I think you have misunderstood me. I did invest in ISAs in the past but I have no money in them at present.

cheerfulcat wrote:

A good website for comparing cash mini ISAs ( and other financial products ) is moneysupermarket.com. As to a FTSE [tracker] ISA, I would be reluctant to put a lump sum into one, especially right now, but regular contributions would allow you to take advantage of downward fluctuations. The FTSE 100 is, as dh notes, rather an unwieldy vehicle partly because of the way it's constructed ( top heavy in a few sectors/companies ) but it's still not a bad way to get stock market exposure. A tracker based on the FTSE All-Share, or one each of 100 and FTSE 250, would spread your bets a bit more.

All the savings accounts I have at present are an instant saver and a regular savings accounts with the Halifax. I am not sure if these are offering me the best rates at present. I am considering building up an ISA savings account as opposed to a pension.

dunstonh

Cash ISAs are not normally considered appropriate for retirement planning. The long timescales and low rates of return mean that you will have to contribute a lot more over the years than you would do say compared to an equity ISA.

cheerfulcat

missma wrote:

All the savings accounts I have at present are an instant saver and a regular savings accounts with the Halifax. I am not sure if these are offering me the best rates at present. I am considering building up an ISA savings account as opposed to a pension.

Hi, missma,

There is no way on this Earth that saving in cash ISAs is going to contribute anything more than pin money to your retirement income - the allowances aren't anywhere near high enough.

You don't have to save in a pension plan as such of course; you can hold investments both inside and outside of ISAs. But some sort of stock market exposure is vital if you want a decent retirement pot unless you have oodles of the stuff to start with, and I mean £millions.

Cheerfulcat

missma

I really don't have a clue, what is the different between a ISA set up for as a savings account and an equity ISA? What sort of savings accounts will bring some sort of stock market exposure?

dunstonh

What sort of savings accounts will bring some sort of stock market exposure?

savings accounts dont bring stockmarket exposure. Savings accounts are deposit accounts linked to interest rates. Designed for short term or emergency fund savings. Not designed for long term and especially not very long term goals.

stockmarket exposure can be obtained in equity ISAs (as first point of call) and then a range of other investments depending on circumstances. No need to worry about the rest if you dont plan to exceed £7000 a year into them.

cheerfulcat

I really don't have a clue, what is the different between a ISA set up for as a savings account and an equity ISA? What sort of savings accounts will bring some sort of stock market exposure?

Cash mini ISAs/savings accounts are normally cash deposit accounts. You put in your cash and the bank/building society pays you interest, at either a fixed or a variable rate, usually tied some way to the bank base rate. Your capital is assured, in nominal terms. That is to say, if you put £3000 in a cash mini ISA for 5 years you will get your initial £3000 + interest back. Bear in mind that in 5 years' time £3000 will probably not be worth as much as £3000 now, and the interest may not make up for the erosive power of inflation.

Equity-based ISAs are invested in the stock market. Capital preservation is not guaranteed - if you put £3000 in for the same 5 years you could get back £3000, or £1000, or £7000, depending on stock market performance and choice of investment.

There are deposit accounts which claim to be stock market linked; they are called usually called guaranteed equity bonds and should be ignored.

You can read more here. It may all seem a bit confusing at first but it isn't difficult to get to grips with the basics.

Good luck

Cheerfulcat