Halifax ISA add sticks in my throat

jack_of_all

The new TV adds from Halifax really stick in my throat. ISA's are seen by many as the first port of call for their saving due to the Government tax incentive. Halifax were one of the first to rip interest rates down to next to nothing knowing that many feel confidence that there savings are best in an ISA. 0.2% for passbook ISA holders who are more likely to not have interent access to monitor rates, that is older people and ones with less money to start with. We can't tell banks what to pay but I think where a government incentive is involved the rules should be that rates must match the lowest non ISA product plus the Government incentive of 0.2%. Basically Halifax and other have just been taking the tax and putting it into their own pockets. Then they have the face to put this add on TV. What do you think.

Lokolo

I think you wrong. Halifax aren't the only ones. And I actually like Halifax ISAs as they do resonble fixed rates.

jack_of_all

Halifax do have some resonable fixed rates, If you have more than £1000 in savings. If you had less than £1000 would you be happy for halifax to take your government incentive into their own pockets. I am talking about ISA been promoted as a first port of call for savings including people who have less savings. I think you are intellegent enough to look out for yourself but not enough to concider how others are effected. I'm alright Jack;). Halifax are not giving the best rates, I am getting better. Others are doing the same as I said halfax were one of the first not the only ones, My post is about the tv add.

jack_of_all

Sorry to all, I am moving this post to the sub board for ISA's

noh

Don't understand your mathematics. What is the government incentive of 0.2% you mention?

Besides Halifaxs lowest non ISA rate on a pass book account is the Liquid Gold at 0.05%
The rate of 0.1% available from the ISA Saver Account is twice as good;)

opinions4u

jack_of_all wrote: »

The new TV adds from Halifax really stick in my throat. ISA's are seen by many as the first port of call for their saving due to the Government tax incentive. Halifax were one of the first to rip interest rates down to next to nothing knowing that many feel confidence that there savings are best in an ISA. 0.2% for passbook ISA holders who are more likely to not have interent access to monitor rates, that is older people and ones with less money to start with.

The advert is for an account paying 2.6% and allowing easy access via phone or internet. It doesn't suggest that it's anything else.

We can't tell banks what to pay but I think where a government incentive is involved the rules should be that rates must match the lowest non ISA product plus the Government incentive of 0.2%

The government incentive is not 0.2%. An ISA is tax free, but providers have additional costs involved in complying with the regulations that surround ISA.

The nearest non-ISA product Halifax currently has on offer that is similar to the ISA Direct Reward is probably the Guaranteed Saver Reward which has a top rate of 1.7% before tax is deducted.

As for the lower rate accounts you refer to, Halifax don't hide the interest rates. In fact as an ISA customer with other savings account I get a nice brouchure every year that tells me exactly what rates they have paid during the previous 12 months. If I choose to bin it and accept a poor rate, who's fault is it?

Basically Halifax and other have just been taking the tax and putting it into their own pockets.

I don't see how paying a higher rate on the advertised ISA is ripping people off. The process of transferring from a passbook ISA to the advertised one takes about 30 seconds.

Halifax do have some resonable fixed rates, If you have more than £1000 in savings.

Last time I looked you could access all their Fixed Rate ISA terms with as little as £500.

If you had less than £1000 would you be happy for halifax to take your government incentive into their own pockets.

2.6% for an easy access account and 3.5% for a 2 year fixed are pretty competitive rates. Lower rates for lower balances - the same applies to their non-ISA accounts too. Lquid Gold and Web Saver Variable pay poor rates that are similar to the passbook ISA account. But the pricing principles are the same, so I don't see any "pocketing of government incentive" going on.

I am talking about ISA been promoted as a first port of call for savings including people who have less savings.

Lloyds own Halifax and pay 2.5% for £1 in an ISA with instant access. If you don't like the Halifax offering there are other providers who may do better for you.

I think you are intellegent enough to look out for yourself but not enough to concider how others are effected. I'm alright Jack;). Halifax are not giving the best rates, I am getting better. Others are doing the same as I said halfax were one of the first not the only ones, My post is about the tv add.

It's become a bit of a rant, hasn't it? If your ISA rate is poor, move it.

jack_of_all

I stand corrected £500 is the savings amount needed for a fixed rate ISA at Halifax. £1000 is for their new product. Yes I had a bit of a rant, I worry about the less intellegent people who just have confidence in the fact that their bit of savings is in an ISA. I say 0.2 % government incentive meaning this is what the tax saving equates to. Of coarse we all have to be keen and chase the changes in rates. I just get a bit sick as I help several people try to get a good deal who have learning difficulties and its hard work keeping them all up to par always having to open new accounts for them. If they're ready to offer some improved ISA rates for new accounts then a little improvement on existing ISA accounts would attract some more deposits also.

opinions4u

jack_of_all wrote: »

I worry about the less intellegent people who just have confidence in the fact that their bit of savings is in an ISA.

To be fair, if they're less intelligent they probably don't have an ISA or if they do are clueless as to why.

I really don't think bank customers should have to hand in a note advising the bank of their IQ when they open an account, to ensure that the bank treats them more generously in the future.

I say 0.2 % government incentive meaning this is what the tax saving equates to.

On the 2.6% Halifax rate, the tax saving equates to 1.04% for a 40% taxpayer and 0.52% to a 20% taxpayer. Where are you getting 0.2% from?

improved ISA rates for new accounts then a little improvement on existing ISA accounts would attract some more deposits also.

Out of interest, where would these deposits come from? If, instead of offering 2.6% on the ISA Direct Reward, they'd just said "I know, we'll pay everybody who we've already got 1.75%" how much extra money would they have pulled in?

The answer is virtually nothing. But they'd have an increased interest bill of £tens of millions for doing what you suggest.

As a taxpaying shareholder, I find the idea of further losses in LBG fairly unattractive, especially when the way you are suggesting they lose more money is totally avoidable.

jack_of_all

Obviously I mean 0.2% of the interest for a 20% tax payer whatever the interest rate, 0.2 % is not meant as a reference to an interest rate just the tax rate.

noh

jack_of_all wrote: »

Obviously I mean 0.2% of the interest for a 20% tax payer whatever the interest rate, 0.2 % is not meant as a reference to an interest rate just the tax rate.

There is nothing obvious about anything you have said.

rb10

jack_of_all wrote: »

Obviously I mean 0.2% of the interest for a 20% tax payer whatever the interest rate, 0.2 % is not meant as a reference to an interest rate just the tax rate.

It's not 0.2% of the interest at all, it's 20% of the interest, which is 0.2 as a proportion.

In this case (the Halifax ISA Direct Reward), it is 0.65 percentage points (as you would need an account paying 3.25% gross to get 2.6% as a basic rate taxpayer).