T D Waterhouse & others cheating us on Interest Rates on self select PEPs and ISAs

JM_2

cheerfulcat wrote: »

" As of the 5th of April ". Don't you think that the date might be significant? And that there might be a lot less cash on deposit in, say, October?

April is the date for which figures are given.

Just as Annual Accounts for companies are produced on a specific date in the year and figures are taken from that.

In October the figure could be higher or lower.

According to the schedules referred to above :

PEP as at April, 2006

Total Value of Funds including cash : £ 79,220,000,000

Cash within above : £ 1,540,000,000

Percentage Cash held : 1.94 %


ISA Stocks and Shares components as at April, 2006


Total Value of Funds including cash : £ 70,406,000,000

Cash within above : £ 1,516,000,000

Percentage Cash held : 2.15 %

The proportion of cash held is really quite small.

You mention October. What about other months ?

What about the month of May ?

You've heard of sell in May and go away !

The total cash in April for PEP and ISA comes to £3,056,000,000.

This figure will vary daily.

Still we are talking about subtantial amounts on which interest is earned.

Thanks

JM_2

JM_2

Biggles14 wrote: »

[Re: JM_2]
Businesses like Financial Advisors, Banks, Stockbrokers etc. are intent on making a profit and the way they do it is charge as big a fee as they can get away with, also annual charges, management charges etc. Shareholders in these Companies benefit by receiving hopefully good dividends. The answer to your question must be therefore that you dont leave your investments with one of these institutions but take care of it yourself. Buy your shares, hold your own certificates, collect your dividends with no charges, and keep your spare cash in an interest bearing account until you need it.

Hi,


I think you have a good point.

I would even go further. If possible invest in your own business.

Unfortunately, many can't for various reasons.

If only the tax system was such that we didn't have to go through these plan managers.

Just as people run their own businesses , they should be able to run their own tax free investment funds.


Thanks

JM_2

JM_2

Paul_Herring wrote: »

Just like to point out, for those that are unaware, that any interest on cash deposits in an investment ISA is liable to tax at your marginal rate - the investments in such an ISA may take advantage of the tax free nature of the wrapper, but cash cannot.

Hi,

Thanks.

T D Waterhouse pays 1/2 % per annum interest.

Take the tax off from that and what are we left with ?

Soon PEPs will get the same tax treatment, courtesy of the Chancellor.

JM_2


:eek:

cheerfulcat

JM_2 wrote: »

April is the date for which figures are given.

Just as Annual Accounts for companies are produced on a specific date in the year and figures are taken from that.

In October the figure could be higher or lower.


You mention October. What about other months ?

5 April is significant because it is the end of the tax year. Huge amounts of cash will be deposited into S&S ISAs just before ( and just after ) that date. I'm willing to bet that the cash amounts in October ( chosen at random for distance from April ) are considerably lower.

Just as people run their own businesses , they should be able to run their own tax free investment funds.

I don't know of any small business which is run tax free. You can certainly operate a tax-free investment within an ISA, you just have to avoid holding cash.

debbie42

cheerfulcat wrote: »

You can certainly operate a tax-free investment within an ISA, you just have to avoid holding cash.

I think the OP maybe knows that, but would complain about the broker charge for managing the wrapper?

JM_2

cheerfulcat wrote: »

5 April is significant because it is the end of the tax year. Huge amounts of cash will be deposited into S&S ISAs just before ( and just after ) that date. I'm willing to bet that the cash amounts in October ( chosen at random for distance from April ) are considerably lower.


I don't know of any small business which is run tax free. You can certainly operate a tax-free investment within an ISA, you just have to avoid holding cash.

If the cash held are really small, then why are these plan managers not paying the market rate of interest on savings.


I am referring here to Businesses dealing with their own administration. Having separate business bank accounts, dealing with the paperwork and compiling their own accounts for submission to the Inland Revenue.

Same way, an investor could do their own administration of tax free investment fund.


Why should I avoid holding cash ?

If I think another October 1987 is around the corner, then I am entitled to hold cash.

There are a number of personal reasons why someone might want to hold cash for a while. Say an investor wants to take a long break and go abroad or take a holiday.


We are allowed to hold cash. The Plan managers should not rip-off their customers in such cases.



Thanks

JM_2

Grey_Squirrel

[Re: JM_2]
I've recently taken some profits, and I've got about £17,000 cash sitting in my Hargreaves Lansdown PEP and ISA accounts earning a 'reasonable' rate of interest ( tiered up to about 4% ). That's about 25% of my total. However, the main point is not the interest but the fact that I'm waiting to reinvest if the market dips from it's current high point. In the meantime, I may miss some possible gains, but that's the risk I'm taking.

JM_2

Grey_Squirrel wrote: »

[Re: JM_2]
I've recently taken some profits, and I've got about £17,000 cash sitting in my Hargreaves Lansdown PEP and ISA accounts earning a 'reasonable' rate of interest ( tiered up to about 4% ). That's about 25% of my total. However, the main point is not the interest but the fact that I'm waiting to reinvest if the market dips from its current high point. In the meantime, I may miss some possible gains, but that's the risk I'm taking.

Hi,

Good to hear that you have made a profit. Congratulation. :T

I think you give a very good example.

There are individual cases, where for many reasons, a large proportion of their fund will be held in cash awaiting investment.

It is only fair that they get the market rate of interest.

If you were to place the money on Deposit direct with a bank, you would get at least 5.50 % pa .






Thanks


:think:


JM_2

jamesd

JM_2, kindly cut the hyperbole down to a reasonable level. You're correct that at the time when cash holdings are expected to be at their highest they amounted to about 2.2% of all stocks and shares holdings, 1.5 billion. What you're not mentioning is that there were 2.65 million accounts subscribed that year so the average amount of cash per subscribed stocks and shares account was 560 even when we completely ignore accounts for past years without a current subscription.

Getting upset in general about an average loss of 28 a year if the money stayed in cash all year and earned nothing while a savings account earned 5% seems excessive.

Of course it's significant to you for your cash where you're deliberately out of the market with a significant sum. I suggest that you use a provider which does offer a decent rate. H-L is one, I'm sure there are others.

If you dislike the rates, take a look at absolute return funds and see if you like them any better.

JM_2

jamesd wrote: »

JM_2, kindly cut the hyperbole down to a reasonable level. You're correct that at the time when cash holdings are expected to be at their highest they amounted to about 2.2% of all stocks and shares holdings, 1.5 billion. What you're not mentioning is that there were 2.65 million accounts subscribed that year so the average amount of cash per subscribed stocks and shares account was 560 even when we completely ignore accounts for past years without a current subscription.
Getting upset in general about an average loss of 28 a year if the money stayed in cash all year and earned nothing while a savings account earned 5% seems excessive.
Of course it's significant to you for your cash where you're deliberately out of the market with a significant sum. I suggest that you use a provider which does offer a decent rate. H-L is one, I'm sure there are others.
If you dislike the rates, take a look at absolute return funds and see if you like them any better.

Hi,

It seems you are working overtime for T D Waterhouse.You say : ' there were 2.65 million accounts subscribed that year '

That's more customers to exploit.

You say : the average amount of cash per subscribed stocks and shares account was £ 560 .

Well. the plan managers / stockbrokers pool all the money together and earn a pretty high rate of interest normally.

Is it not reasonable to expect them to pass on the bulk of interest earned on the money. I expect them to keep no more than 1 %. And not 5% , as in the present circumstances.

Or ignoring very small balance like say £500, should they not pay the market rate of interest on cash balances above these amounts. Or say even above £2000 cash balances.

At present these sharks are operating unfair practices and there should be some law to stop them.


I don't like to be cheated.


Thank you.

JM_2