Sylvia Morris - Daily Mail - Great Cash ISA CON

bigfreddiel

Who else thinks Sylvia Morris speaks out of her a*se!

Okay I know its th Daily Mail so one shouldn't expect anything but doom and gloom, but this time in her "Great Cash ISA CON" article she really tops herself this time.

Read the article and make your own mind up (I'm sure its on the Daily Mail web) but to mention one thing she does.

She compares Taxable rates of interest with ISA rates (tax free obviously) for example a taxable rate of 4% with an ISA rate of 3.55% - she reckons the ISA is 0.45% worse - well not for a tax payer it isn't - that 4% for a basic rate tax payer is actually equivalent to 3.2% and for a higher rate tax payer even less (2.4% I believe).

fj

ses6jwg

http://www.dailymail.co.uk/money/article-1366583/The-great-cash-ISA-How-greedy-banks-fix-rates-steal-YOUR-tax-free-income.html

This is the article in question and yes its a load of crap.

1. They compare like-for-like at the same institutions without taking into account that there might be a higher paying ISA at a different instituion.


e.g. The best easy savings taxed savings account is currently paying 3.01%.

HOWEVER

The best easy access ISA (with no other strings) is paying 3.0%

ALSO

The best 2 year fixed rate bond is paying 3.85%

the best 2 year fixed rate ISA is paying 3.7% (hardly a staggering gulf is it?)

2. Most of the comparisons are on the gross rates, and after tax the bonds pay less than their ISA counterparts.

3. They make the mistake that a great number of Daily Fail readers make and believe that "the dreaded banks" all took "middle Englanders" tax money and now all owe a great debt of gratitude to Colin and Sheila the homeowners from Chipping Norton.

I work in a bank and all the extra regulation and paperwork that is associated with ISAs I would expect that they cost more to administer than their non-ISA counterparts, hence a slightly differnece in rates.

bigfreddiel

Cheers, why do people like Sylvia Morris wrire such utter cr*p and how many people believe it?

I'm emailing her witha few comments, polite of course, she's never repied to me in the past so I'm not holding my breathe.

Here's her email sy.morris@dailymail.co.uk

fj

HMRC100

bigfreddiel wrote: »

Cheers, why do people like Sylvia Morris wrire such utter cr*p and how many people believe it?

I'm emailing her witha few comments, polite of course, she's never repied to me in the past so I'm not holding my breathe.

Here's her email [EMAIL="sy.morris@dailymail.co.uk"]sy.morris@dailymail.co.uk[/EMAIL]

fj

You obviously do not fully understand what she is getting at...
She is looking from the perspective of the banks. The Halifax 1 year bond costs the bank 3.35% including tax. The 1 year ISA costs the bank 2.00%. She is simply asking why the massive difference? Do costs of admin for the ISA justify a 40% drop in interest rate?

rb10

HMRC100 wrote: »

You obviously do not fully understand what she is getting at...
She is looking from the perspective of the banks. The Halifax 1 year bond costs the bank 3.35% including tax. The 1 year ISA costs the bank 2.00%. She is simply asking why the massive difference? Do costs of admin for the ISA justify a 40% drop in interest rate?

But that example is flawed ... Halifax will give you 3% (or 3.2%) on a one-year account ... which is only slightly less than the 3.35% on a fixed rate account.

Equivalently, you could say:
Halifax's highest rate instant access ISA pays 3% (or 3.2%).
Their highest rate instant access non-ISA account pays 2.6% (or 2.8%).
So the ISA is paying more than the non-ISA.

You can twist figures to say pretty much anything.

All in all, I'd say just ignore it. It's the Daily Mail, and unfortunately you'll never manage to change their mistaken attitude of most things.

ses6jwg

HMRC100 wrote: »

You obviously do not fully understand what she is getting at...
She is looking from the perspective of the banks. The Halifax 1 year bond costs the bank 3.35% including tax. The 1 year ISA costs the bank 2.00%. She is simply asking why the massive difference? Do costs of admin for the ISA justify a 40% drop in interest rate?

Not every bank can be competitive at every single product.

I dont understand this constant clamouring to compare taxed products like-for-like with ISAs

it is better to compare the "best buys" between all institutions.

Every instituion will differ.

e.g. I work for Santander.

Our best 2 Year FRB pays 3.55%

Our 2 year FRISA pays 3.7%

HOWEVER

Our best instant access ISA that ALLOWS TRANSFERS IN pays 2.5%

Our best instant access ESAVER pays 2.9%

It is better to compare the best buys from each catagory rather than in the same bank.

The Daily Fail more than anyone should realise that to get the best rates you need to "tart" your savings about.

edinburgher

Don't read the Daily Mail, it's crap.

I wish I could put that in a more erudite phrase, but I can't :rotfl:

I genuinely believe you'd be better off not keeping up with current events than reading the bilge they print.

3. They make the mistake that a great number of Daily Fail readers make and believe that "the dreaded banks" all took "middle Englanders" tax money and now all owe a great debt of gratitude to Colin and Sheila the homeowners from Chipping Norton.

Thanks for this, always good to have a chuckle on a cold Thursday morning!

switch76

I think the article has a point. Why should a bank offer you a worse rate for an identical product just because it's in an ISA? The ISA is meant to provide tax relief for customers not for the banks to take a cut to increase their profits.

Nationwide has this as one of their pledges which I think all banks should have:
We guarantee our Fixed Rate ISA rates will match or beat our equivalent Bond rates so you get the most from your ISA tax relief.

jimjames

bigfreddiel wrote: »

Cheers, why do people like Sylvia Morris wrire such utter cr*p and how many people believe it?

I'm emailing her witha few comments, polite of course, she's never repied to me in the past so I'm not holding my breathe.

Here's her email [EMAIL="sy.morris@dailymail.co.uk"]sy.morris@dailymail.co.uk[/EMAIL]

fj

It always shocks me to read the Daily Mail and how a legitimate story can be so twisted out of proportion to give an article in their paper. This is no different to most of their "news"

switch76

The Telegraph also comment about fixed rate ISAs paying less than fixed rate bonds.

http://www.telegraph.co.uk/finance/personalfinance/comment/paulfarrow/8394689/Isa-savers-lose-out-in-the-banks-latest-wheeze.html