Worth converting cash isa to stocks and shares isa?

chamelion

Hi all,

Is it even worth having a cash ISA any more? I'm basically at the 2% return rate on first direct for deposits over 40k.

I've recently entered the world of s&s ISAs (can't believe I've never considered them before) and I'm now tempted to convert my cash ISA into my S&S ISA. If I distribute the amount across a number of funds I can expect much larger returns than the measly 2% I'm currently getting?

Archi_Bald

You should have some 6-12 months living costs readily available in cash. Also, any planned expenditure in the next 5 or so years should be kept in cash.

Beyond that, there is no reason for not keeping your money in investments. Clearly, you have no guarantee for your return, but historically, equities have outperformed cash.

chamelion

Archi_Bald wrote: »

You should have some 6-12 months living costs readily available in cash. Also, any planned expenditure in the next 5 or so years should be kept in cash.

Beyond that, there is no reason for not keeping your money in investments. Clearly, you have no guarantee for your return, but historically, equities have outperformed cash.

No problem with cash - have various and multiple accounts with lloyds (3%), santander (3%), nationwide (5%) etc. Losing 5 of my nationwide 5% accounts and having a regular saver mature so finding new avenues of putting away money.

so aside for this "have cash for a year of heavy rainfall" seems killing this ISA is the way to go...

Archi_Bald

chamelion wrote: »

so aside for this "have cash for a year of heavy rainfall" seems killing this ISA is the way to go...

well, not killing it exactly, but getting an S&S provider to transfer it for you into an S&S ISA, yes.

You are probably aware this is a one-way street but it doesn't sound like an issue in your case.

chamelion

Archi_Bald wrote: »

well, not killing it exactly, but getting an S&S provider to transfer it for you into an S&S ISA, yes.

You are probably aware this is a one-way street but it doesn't sound like an issue in your case.

Right - sorry - not killing but rather transferring it. Just set up instruction to my s&s ISA provider to transfer over my cash isa

Thanks for the advice!

planteria

i have a little cash ISA with Skipton that ive had for years.

nowadays i use my full ISA allowance for S&S. wouldnt want to waste it on cash, especially at current rates.

Mikeyorks

chamelion wrote: »

Is it even worth having a cash ISA any more? I'm basically at the 2% return rate on first direct for deposits over 40k.

It's over 5 years since I last contributed to cash ISAs - having seen the writing on the interest wall. Albeit I didn't think the wall would be as high as it is! Everything has gone into S&S ISAs in the meantime.

In the interim I've just re-cycled the cash ISA funds into the best available fixed rates. When the current 3.7% fixes expire later this month / and April then all the funds will transfer to my S&S ISAs.

Those have made 30% in the last year and average over 12% on a rolling year basis - so there's little competition from cash? The argument about keeping reserves in 'cash' is trotted out almost ritually but needs to be distilled properly. Just because an ISA is 'cash' doesn't mean it's immediately useable as more and more people 'fix'. I can liquidate a part or the whole of my S&S ISAs, on the other hand, within 4 / 5 working days. At no penalty other than that timing in the market may not be ideal.

It's the right way to go for me. But if you're a relative novice in the S&S field I wouldn't have been burning my Cash ISA boats just yet?