How to evaluate current isa's

KD

I've had a good look through the boards and articles, however haven't been able to 'spot' any thread that helps.

I've just started to get into this whole ISA thing and have ISA for myself and have started to look after my mum's affairs, so need to look into hers too.

I'm not really sure how to go about appraising if our current ISA'a are any good or not and was looking for some guidelines to help me start understanding their merits/ demerits.

Could someone point me in the right direction, I'm interested to learn more, but don't really know where to start. I know a lot is about individual circumstances, however some starters for ten would be good.

grumbler

You can evaluate (cash) ISAs the same way as you do this for any saving accounts: interest rate, access, …
The main differences are:
1. £3000 allowance. If you withdraw money from ISA you still cannot put more than £3000 during financial year. This restriction is in force for any cash-ISA.
2. Special procedure of moving money from one provider to other. Some providers can charge you for this as, for example, A&L does (read this thread ). They must indicate this in T&C.

dunstonh

when looking at investment funds and assuming you dont want to access professional tools or services (which cost), then take a look at http://www.morningstar.co.uk/

It will give you information on each fund, how it is invested, where, past performance and ranking (the latter dont tell you anything about future returns but its sometimes nice to know).

KD

Thanks- I'll try these and come back for pointers, if i get bamboozeld....be prepared!

lipidicman

I think the ISAs this year are rubbish! I hope some better ones show up after april the 6th (I have subscribed this year)

I posted this a few days ago, detailing why I dont like the current top ISAs

5.15% for the halifax direct ISA seems pretty good to me

The competition:
Abbey - its abbey, and the delays!
A&L - exit penalty of £25 sneaked into the T&Cs
First Direct - headline grabbing bonus and restrictions, but good if you can be bothered

So for me an ISA should have a consistently high rate - and no exit penalty and ease of use. I will be going to the halifax come April 6th unless anyone can suggest otherwise!

And now CAT standards are going it seems things will get worse

isasmurf

Why should CAT standards going mean things are going to get worse. CAT standards are only going, because they are being replaced. And for once being replaced by something better (at least for Cash ISAs).

lipidicman

Ok, my mistake - what are the new rules?

KD

dunstonh wrote:

when looking at investment funds and assuming you dont want to access professional tools or services (which cost), then take a look at http://www.morningstar.co.uk/

It will give you information on each fund, how it is invested, where, past performance and ranking (the latter dont tell you anything about future returns but its sometimes nice to know).

I've had a quick trawl this site - which looks really promising for my purposes, if a little overwhelming at first; probably take me a few days to get to grips with it.

I do like the fact you can set up your own portfolio and keep up with your maxi ISA.

KD

grumbler wrote:

2. Special procedure of moving money from one provider to other. Some providers can charge you for this as, for example, A&L does (read this thread ). They must indicate this in T&C.

Thanks for the link, will make sure I don't inadvertantly trip up if I decide my mum's cash isa needs to move.

isasmurf

lipidicman wrote:

Ok, my mistake - what are the new rules?

The Cash Stakeholder product is the same conditions as the CAT ISA with the exception that the interest rate must be no less than 1% below base rate (currently 2%).

The medium term Stakeholder product can be either
A unitised investment, which may be a unit trust, an open-ended investment company or a unit linked insurance product. There will be a limit of 60 per cent on the value of the investment to be invested in equities and property.
or
A smoothed investment fund, which is broadly a smoothed unit linked arrangement. Volatility of returns will be reduced through smoothing, while additional features improve transparency for the consumer. The fund is not a conventional with-profits fund as it will not participate in the profits and losses of the business. Limited to 60% exposure in equities

Charges will be capped at 1.5% for the first 10 years and 1% thereafter for either of these Medium term products.

Stakeholder Pension has been well documented. 1.5% charge for the first 10 years and 1% thereafter. Must offer lifestyling.

Stakeholder CTF charges same as Stakeholder Pensions.

You should note that there is a difference to CAT standards in that Stakeholder products can be held in their own right and do not necessarily need to be held in an ISA.

dunstonh

Initially i thought using the stakeholder name would cause confusion. However, with the life companies now changing their stakeholder pensions to be limited feature options rather than their mainstream product, as it should have been from the start, it now makes more sense.

You will see the term stakeholder (or sandler suite of products) applied to a range of financial services. It will mean cheap and simple products. Although you can buy these direct yourself, the advice process that can be used for these simple products doesn't require a financial advisor. A bank clerk can go through the stakeholder sales process (flow chart and decision trees mainly) and then sell you products. There is no liability for the advice either as you self certify it.

The sandler suite of products is geared towards the banks as they are going to have a field day getting in their customers and selling them products on a large scale without any liability for the advice given. So be wary when the bank invites you in for a chat with their financial advisor. Chances are it wont be a financial advisor and there will be no liability for the advice given.