To ISA or not to ISA?

vaporate

ISA's are rubbish. I have one and its pathetic. Tax free status is just a punch line to hook you in. The interest paid is peanuts.

ultrawomble

vaporate wrote: »

ISA's are rubbish. I have one and its pathetic. Tax free status is just a punch line to hook you in. The interest paid is peanuts.

Is there a specific reason why you haven't transferred your ISA to a provider who's paying a better rate?

ISAs are great - I managed to get 5% for this year's subs (and transferred in last year's). Go for fixed rates with the highest interest : lowest break penalty and you can't go wrong in this climate. But you'll probably have to wait 'til the end of the tax year for the best deals to come on stream. As ever, snooze and you loose.

RayWolfe

ultrawomble wrote: »

Is there a specific reason why you haven't transferred your ISA to a provider who's paying a better rate?

Wouldn't you be surprised if you discovered that a BNP supporter had sufficient brains to think through something as simple as transferring an ISA?

toffee87

Lol.

I'm not expecting high rates, what with the current economic climate, but the tax free-ness is a bonus

cyclonebri1

bigfreddiel wrote: »

Save into an isa - not only is it tax free (you get to keep 100% as opposed to 80% as a normal tax payer) but if you need to complete a tax return you do not need to declare any ISA savings information - makes life a whole lot simpler.

My wife and I have been saving into cash ISA's for many years - now have £80k at 4.4% - okay not quite beating inflation but better than giveing 20% (£700+) back to HMG!

Care to explain that one then? Would it be Halifax's rate very early this year for a 4year fixed term account.

And with no disrepect, is it possible to have that capital amount in 2 isa's? can't recall exactly when they came in. Thinking about it Tessas could be converted to isa's if I recall.;)

toffee87

He doesn't actually say he only has two...and he says for many years.

lisyloo

{QUOTE]If you pay into an Isa, that is it. You get your interest paid at the end of the tax year[/QUOTE]

My ISA with First direct pays interest monthly.
I don't think it's to do with being an ISA or not.
Some accounts pay annually and some monthly.

cyclonebri1

toffee87 wrote: »

He doesn't actually say he only has two...and he says for many years.

Yes but in only 2 names, him and his wife,ie, £3600 per annum total each, as it was before it went up

MiserlyMartin

vaporate wrote: »

ISA's are rubbish. I have one and its pathetic. Tax free status is just a punch line to hook you in. The interest paid is peanuts.

Thats right, well it is nowadays. A better deal would be the NS&I index linked certs, tax free and you know you will always beat inflation. Since the best ISA deals are usually 1 year fixes there is no difference as after a year with NS&I you can get at the money without the interest penalty.

Those holding ISA's are only doing so to keep the tax free allowance hoping and assuming that the interest rates will improve once again to beat inflation. But how long will we have to wait? As we are losing money everyday!

Primrose

As a general rule it seems to me that ISAs at the moment with their low interest rates are better deals for taxpayers who can leave the money undisturbed for long periods, which means you can still get a reasonable interest rate for a 4 or 5 year fix. If taxpayers are only paying into an ISA for 12 or 18 months the difference in tax free interest isn't worth it over a taxable account which pays a higher interest rate.
Once you've built up a reasonable sum over several years in an ISA, it can become quite a valuable commodity in terms of tax avoidance, especially in austerity periods like this where taxes are only likely to increase.