Basic question (sorry!) Cash or stocks ISA?

Moosh123

Hello,

I haven't got an Isa for this year, but looking at the guidance on this site , I will. Is a cash Isa better to get first and then look at getting a shares one? (That's assuming I can save over the £5k cash Isa allowance)

Any help appreciated

innovate

You would need to provide a lot more information for sensible comments, such as:

How old are you?

How risk-friendly, or otherwise, are you? What losses (temporary or permanent) could you tolerate?

How many years can you lock your funds away?

What pension provisions do you have?

What tax rate do you pay?

Have you got any 'rainy-day' savings already?

VfM4meplse

innovate wrote: »

You would need to provide a lot more information for sensible comments

You're right, but I don't agree with your response because the OP has asked a questions suggesting the answer is simple - and betraying a certain naivety in doing so.

This to me would indicate a cash ISA would suit as an initial investment whilst s/he can research the stocks/shares option properly for themselves. It would have been polite to at least have searched the threads before asking the q.

jimjames

If you're saving more than £5k and want it to all be tax free then yes you would need to put the remainder in a S&S ISA.

Alternatively you could put the whole amount in a S&S ISA and not have any cash element.

As per reply #2, it all depends on your current situation and attitude to risk. If you have no cash savings currently then that should be a priority. If you have savings outside an ISA then get them into one quickly to avoid paying tax on your interest - assuming you are a taxpayer.

Moosh123

Hi,

I'm 31, am a higher rate tax payer, have a pension, (will) have £5k to invest but don't have much other savings. I have a low tolerance to risk at the moment because I know I need to start putting away cash, so don't want to gamble on the markets just yet.

Is it worth opening an Isa now, or waiting until March? Someone told me that rates are most competitive at the beginning & end of the financial year...

Moosh123

Vfm4meplse, not sure I understand the need for your 'it would have been polite' comment. Reference the notice kindly provided by mse.

jimjames

Moosh123 wrote: »

Hi,

I'm 31, am a higher rate tax payer, have a pension, (will) have £5k to invest but don't have much other savings. I have a low tolerance to risk at the moment because I know I need to start putting away cash, so don't want to gamble on the markets just yet.

Is it worth opening an Isa now, or waiting until March? Someone told me that rates are most competitive at the beginning & end of the financial year...

Where is the money now? If it is in an account you are having to pay extra tax on (as you are higher rate) then it would be worth putting it in an ISA immediately. You can then move to a better rate if one comes along.

If you don't have other savings then you should build cash up first, many say having enough to cover 6 months worth of expenses is a good number to aim for.