ISA advice

isasmurf

All,

I thought this thread was losing it's point, so I've moved the posts relating to the Dividend Tax Credit and it's effect on the economy/Stockmarket/Pension Funds to the Discussion Board.

http://forums.moneysavingexpert.com/showthread.html?t=30535

isasmurf

You should really only use a Maxi ISA if you want to invest more then £3000 (£4000 from April) in Stocks & Shares. By investing in both the Stocks & Shares and Cash in a Maxi you will nearly always compromise somewhere.

For example, the few fund managers that do offer a cash component pay poor rates, whereas the High Street Banks will generally not perform as well in the funds, although will offer good rates.

MJSW

I think once you decide the shares/cash/insurance split of the maxi ISA, then the components have to remain segregated and you can't move funds between them. However, just to confuse matters further, you can also hold cash within the stocks and shares component of an ISA if it is held for the purpose of eventual investment in qualifying funds! So if you wanted to withdraw the income from the stocks and shares, then you can just withdraw it from the stocks and shares component.

However, the interest on the cash balances held in the S&S component is subject to a 20% tax deduction.

Paul_Herring

Paul_Varjak wrote:

Is it possible to get, say, to get a maxi ISA with both stocks & shares and cash elements and have any income from the stocks & shares element paid into the cash element (on the assumption that you can withdraw the cash from the cash element when you need to)?

The supplier I'm with offers two plans for what I invest in (it's only an index tracker however) - one where the income is re-invested into the index and one where the income is deposited in your bank/BS account.

Close enough to what you're asking?

Holesinpockets

Right, I am slightly less confused than before...but I'll challenge you all now.

I want to invest the full 7k for both myself and my wife. I want to avoid high risk. So I guess I should take out two mini ISA's each. One cash ISA(3k) and one S&S ISA (4k). Ok so far? Any suggestions for which ISA's. Remember ideally I would have put the 7K in cash, but as that's not allowed I guess I want the Stocks and shares part to be fairly secure or as low a risk as possible.

dunstonh

ISAs can invest in low risk funds as well, such as corporate bonds.