Do I need an ISA

lifebeginsat...

Hi all,

I recently successfully opened a basic Barclays cash card account.

I had to endure a 2 hour meeting to set this up, and came out with life insurance, home insurance (which I did need), and an ISA. Anyway..
I did want a savings account but I am a little clueless about ISA's. Who are ISA's aimed at generally?

I now think that a simple monthly savings account would serve my purpose as I will not be saving any large amounts (probably max. £1000 over a year). I need instant ability to transfer savings to my bank account, as I often needed to do this with my old Natwest account. I will regularly be dipping into it too.

To be honest I don't really want the life insurance either, if I cancel the life insurance and ISA would this annoy the bank manager who persuaded me into them and risk them closing my newly opened account.

Many Thanks:)

gadgetmind

Don't be at all concerned about upsetting the bank manager, not for one second! Cooling-off periods are there to protect people from being pulled in by smooth salesmen - use it.

Have you put any money into the ISA? What interest rate does it pay?

If you don't want the life insurance, then cancel it.

As for the ISA, these are aimed at those who want to save either regularly, or as lump sums, and who are probably going to leave the cash there unless there is an urgent need for it. Their single advantage over other accounts is that you don't pay tax on the interest.

atush

If you want home or life insurance, the bank is the most expensive place to get it. So cancel if you don't want it, but I would get your home insurance set up elsewhere. You can get good quotes online look at gocompare, moneysupermarket etc. Life insuranc is important if you have dependants, but check you don't have some with your work first. And again it will be cheaper elsewhere.


As for your isa, a cash isa that allows instant access will be fine for your savings if you pay tax. As any money left in the acct- at least you won't pay tax on the interest. you can borrow back some if needed and let the rest stay there. Or you could set up a regualr saver, but you will pay tax on the interest.

lifebeginsat...

Hi thanks for your reply, oh he was smooth. :rotfl:

I was 'advised' to put £20 in to open the ISA (even thought it suggests minimum £1 to open.)

The rate is 2.0%.

Just checked and there is instant access, and their monthly savings account states minimum deposit £20 a month, so maybe I would be best sticking with ISA.

To be honest I don't really save enough for any noticeable amount of interest. (although plan to improve on this now lol)
Thanks again.

lifebeginsat...

atush- good point about dependents, maybe I will keep it, particularly as I'm a lone parent but I will see if I can find a cheaper one, this one is £7.64 p.m for £25,000. I'll compare the contents insurance too, but not received policy yet and can't remember how much it was. (must have been getting near to end of 2 hrs at that point and I was probably brain frazzled.)

gadgetmind

lifebeginsat... wrote: »

I was 'advised' to put £20 in to open the ISA (even thought it suggests minimum £1 to open.)

Now that you have contributed money to that ISA, you can't open another until next April 6th.

The rate is 2.0%.

That's very low even for an instant access ISA. Banks are generally bad places to buy any kind of investment or insurance product.

See the MSE article on cash ISAs -
http://www.moneysavingexpert.com/savings/best-cash-isa

With only £20pcm going in, you might just want to keep it going but also start looking around for a better home for your money next tax year.

MrandMrsB

Oh I see, they kept you there until you signed up for things you did not need!

Lloyds TSB did the same thing to my aunt when she was nearly 90 years old - because of head office targets apparently. Around 6 months later she phoned me in a hysterical state: she had received a letter from the bank about owing them money. I am certain the incident caused her to suffer a heart attack (she survived it). Apparently the bank manager had signed her up for a credit card, but since she was deaf she trusted his judgement (as people did when she was young), had never heard of a credit card and was not short of money, so she assumed it was an ordinary debit card. We sorted it out for her and had all the charges waived. I was so angry with the manager that I don't think he would have wanted to take me on somehow!! My aunt was my best friend and I miss her terribly.

You should ask yourself whether you want any of those products.

As for the home insurance, I found a gem of a broker - CIA Insurance. Bought insurance for our house, for properties that we used to let out, our son's flats, etc and so far Money Supermarket has told me that they cannot offer anything remotely close to those deals. Not only that, we had a run of "bad luck" (car hit while parked, involved in motor accident, collapsed drain) and had to claim on insurances for the first time ever, and I am delighted to say that each went smoothly - apart from the excess we were not out of pocket.

Maybe you want to consider changing to a more reputable bank??? We are delighted with First Direct. Changing banks was part of my new year's resolution several year ago - only deal with reputable companies......so it's Lakeland, John Lewis, Waitrose (when we manage to travel to our "local" branch), First Direct, etc, and no, it isn't more expensive!

Hope you sort it out soon.

atush

If you have dpendants then get some life insurance. I got some when i wasn't working. I insured myself for over 100K just to pay for child care if I died as i had 3 under 3 incl twins and so the money would have been needed for them. Will be letting it lapse, as soon as they are all at uni lol.

Loughton_Monkey

lifebeginsat... wrote: »

I had to endure a 2 hour meeting to set this up, and came out with life insurance, home insurance (which I did need), and an ISA. Anyway..

Oh dear!

All to familiar I'm afraid.

Some banks can be good for (a) Current Accounts, (b) Regular Saver accounts, and (c) mortgages.

They [the big 4 anyway] are typically 'poor' for (a) Savings products including ISA, and (b) Insurance. [Although Halifax and Santander tend to have some good savings rates]

Then they tend to be abysmal at Investment products.