Is it nicer in an ISA?

edited 30 November -1 at 1:00AM in Money Saving Polls
6 replies 1.6K views
Former_MSE_NatashaFormer_MSE_Natasha
672 Posts
edited 30 November -1 at 1:00AM in Money Saving Polls
Poll Started 7 November 2006: Is it nicer in an ISA? Last week's savings poll taught me that many MoneySavers have more in savings than I thought and I've refocused the article accordingly. For the same reason, I want to know what you do with your ISAs. As it’s possible to have done different things with ISAs over a number of years, which of these is closest to your situation?

A. I don't have savings
B. I have savings, but don't usually use ISAs
C. I main use a (mini) cash ISA(s)
D. I mainly use my ISA for shares
E. I've got a mix of shares and cash ISAs
F. What is an ISA?

Vote here or click reply to discuss
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Replies

  • I'm glad MSE has finally started to take a look at this...

    Cash mini ISAs are a well covered topic on MSE.com but there is nothing on mini share ISAs and maxi ISAs.

    While it's nice to know that the tax man can't get his hands on your capital gains when you have shares in an ISA, no-one seems to make it clear that you get quite a substantial allowance before you have to start paying capital gains tax anyway. So in actual fact you have to own a lot of share-based ISAs before you're likely to reach this threshold (or alternatively own a second property, or more). Hence, putting shares in ISAs isn't the most sensible thing to do, and yet you're led to believe it's very sensible. The cash ISA element is the most efficient part, tax-wise, unless you've a lot of savings.

    For example, to make over £8,000 in capital gains (the approximate allowance) you'd need the stock market to go up by 20% (a good year, but by no means unheard of) AND have £40,000 in share-based ISAs - which is six years' worth of full maxi ISA allowance. I doubt that applies to most people.

    Please get advising, MSE...
  • ManAtHomeManAtHome Forumite
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    Part of the Furniture Combo Breaker
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    I'd agree that ISAs are not always the best place for shares, but you may just want to leave the investments (trackers) and cash them all in the same tax year some time in the future..?

    I use cash ISAs, but have enough in equities in my pension fund (keeping eggs in separate baskets..)
  • irishwench69irishwench69 Forumite
    807 Posts
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    Cash ISAs only for me right now, as my priority is saving money towards a house deposit.

    As a higher rate tax-payer, I find putting more into my pension scheme at work is a better use for my money over the share-ISAs.....

    HTH,

    IW x
    Official DFW Nerd Club - Member no. 222 :beer:
    :T Debt free wannabe - Proud to be dealing with my debts! :T

    Remember the MoneySaving mantras!

    IF YOU'RE SKINT......
    Do I need it? Can I afford it? Can I find it cheaper anywhere else?

    IF YOU'RE NOT SKINT......
    Will I use it? Is it worth it? Can I find it cheaper anywhere else?
  • EdInvestorEdInvestor
    15.7K Posts
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    The trouble with pensions is the tax.When you retire, you get taxed on your state pension.That uses up your basic personal allowance.Then there's S2P -that uses up your age allowance.Then your company pension(s), and before you know it you're into double digits and well into basic rate tax.

    Once you get up to 20k or more, you start losing your extra age tax allowance. :(

    But income from ISAs is tax free :) It doesn't count. You can have as much of it as you like and the taxman doesn't even want to know.

    It's definitely wortth maxing out your stocks and shares ISAs once you've got a nice cash emergency fund set by.
    Trying to keep it simple...;)
  • david78david78 Forumite
    1.7K Posts
    It is definitely building up a mix of Cash ISAs and investment ISAs. Even if you can't afford the full £7000 (or £3000 and £4000 if going for a mixture in one year), its worth paying some savings into both asset classes.
  • Former_MSE_AndreaFormer_MSE_Andrea Former MSE
    9.6K Posts
    1,000 Posts Combo Breaker I've helped Parliament Rampant Recycler
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    Poll Title: Poll Started 7 November 2006: Is it nicer in an ISA? Last week's savings poll taught me that many MoneySavers have more in savings than I thought and I've refocused the article accordingly. For the same reason, I want to know what you do with your ISAs. As it’s possible to have done different things with ISAs over a number of years, which of these is closest to your situation?

    C. I mainly use a (mini) cash ISA(s) 46.9% (1187 Votes)
    E. I've got a mix of shares and cash ISAs 15.5% (394 Votes)
    A. I don't have savings 14.9% (377 Votes)
    B. I have savings, but don't usually use ISAs 14.7% (373 Votes)
    D. I mainly use my ISA for shares 5.6% (143 Votes)
    F. What’s an ISA? 2% (51 Votes)

    Total Votes: 2526
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