Is anyone bothering with a cash ISA in 13/14?

latecomer

Martinslovechild wrote: »

Think about this - some people might be considering opening a fictional cash ISA offering a 3% rate where you have to tie money away for 12 months INCLUDING a 2% bonus!! That's really got to be the offer of the century - NOT!! Why would anybody tie money up for 12 months just for it to be worth LESS in real-terms than it is today?

If someone needs their savings to be a defined value in a set period i.e. in 2 years time to buy a house then S&S isn't the right choice. Yes it may be worth a bit less in real terms but you are not subject to the large drops that can be experienced by shares.

That said I'm on the verge of taking the plunge into a S&S ISA for the first time, primarily due to the low rates of the cash ISAs which we have far too much money in.

brewerdave

In the same position as you latecomer - just realised how many of our fixed cash ISAs are maturing this year,also last year's easy access account 3% bonus is finishing:eek:, so I'm going to plonk for S +S ISAs for a chunk of them; probably will take out one instant cash ISA for short term emergencies,but for the first time in several years going back into S + Ss.

latecomer

I need to discuss things with OH as she is particularly averse to shares but at the end of the day the money we have worked hard to save is slowly being eroded by inflation. I'm tempted to keep hers in cash and transfer mine into S&S - which would be approx 50:50 split between Cash and S&S.

Catslovelycats

I'm going to have a new cash ISA next year. But then I shall be lucky to get £3000 saved during the year, so I'm not talking big money!

Like another poster has said, I want to have the money to hand in case of an emergency and for me it's about my money being 'safe' (or these days perhaps I should say 'safER' for the future.

I'm not a big investor or anything so my situation is probably a lot different from others of you... :cool:

Robin_TBW

I'll be opening a new ISA and keeping an eye of what's available as soon as. My current one runs out at the beginning of May so I have to keep that in mind too to make sure that ends up in the right place too. I'm probably going to end up with two, hopefully the new one will be alright to take a late transfer... who knows, we'll look closer the time.

LannieDuck

I agree with innovate - it is difficult to take the plunge into S&S ISAs. At least with cash ISAs you have a limited number to compare, and if you're looking at fixed rates, you know how much you'll get back at the end.

The choices with S&S ISAs are overwhelming. Firstly whether you go for individual shares/funds/trackers/something else like bonds or gilts. Secondly which companies/markets to invest in, and thirdly which wrappers to use. I've done a huge amount of reading and it's still daunting (although becoming less so).

edinburgher

I'm not planning on a cash ISA next year. Mrs E and I now have about £5k in our current Emergency Fund (which will stay in an ISA).

Beyond that, we can put up to £20k in the Santander 123 account at 3% (before tax). If and when we're lucky enough to have more than £20k sitting about, I'll look at it again.

Of course if rates shoot up again we will re-visit.

innovate

As of today, Nationwide are offering a current account with 5% AER on up to £2.5K, provided you deposit £1K per month from a non-Nationwide account. This offer is for 12 months only and called their FlexDirect current account. At the end of the 12 months, the rate plummets to a terrible 1% AER.

The FlexDirect won't suit everybody, but if you can avail yourself of one of these, it's a lovely way to get 5% AER before tax (4% AER after basic rate) on roughly half your cash ISA allowance. You can then still decide by April 5 2014 whether to put the lot into a cash ISA or do something else with it.

If of interest, look for the FlexDirect threads on the Savings and on the Budgeting/Bank accounts boards.

Alex92_2

innovate wrote: »

As of today, Nationwide are offering a current account with 5% AER on up to £2.5K, provided you deposit £1K per month from a non-Nationwide account. This offer is for 12 months only and called their FlexDirect current account. At the end of the 12 months, the rate plummets to a terrible 1% AER.

The FlexDirect won't suit everybody, but if you can avail yourself of one of these, it's a lovely way to get 5% AER before tax (4% AER after basic rate) on roughly half your cash ISA allowance. You can then still decide by April 5 2014 whether to put the lot into a cash ISA or do something else with it.

If of interest, look for the FlexDirect threads on the Savings and on the Budgeting/Bank accounts boards.

Was going to mention this. I am going to look into this asap. Hopefully you can open up four accounts with them. Will have £10K in Flexdirects(4x2500) getting 5%, £18K at 4% in 3 Lloyds Classic Vantages (finish in October though) and then £11400 in Cash ISA.

In reply to OP. I have recently used up my full Cash ISA allowence for 12/13 year and will plan on putting full amount in 13/14 tax year too (just maybe not all at once, perhaps nearer towards feb, as the rates are pretty awful).

Only reason im bothering to use up my ISA allowence is that I dont want to get involved in S&S just yet (due to saving for a deposit and potentially needing access quickly) and I hope that in a few years I will be able to build up a nice bit of capital in ISA pot, which will also pay off when the interest rates shoot back up again(!).

michaels

Oh - another reason for having a cash isa (at least until universal credit comes in) is that interest earned on isa savings is not considered when calculating tax credits whereas other interest income results in a 39% withdrawal of credits.