MSE News Comment - Martin Lewis: Will you really gain from the new NISAs?

jimjames

ColdIron wrote: »

Not all ISA contributions come from wages. There are many people with substantial cash savings or investments that they have built up over the years who are moving them to the shelter of an ISA. Many of these people may even be retired or on a low income

That's true if you already have the pot and move it in.

But I still think for the average person the increase is of limited appeal when they can't even save the current cash ISA limit.

I'm on a decent salary and still struggle to fill a S&S ISA each year.

kidmugsy

jimjames wrote: »

That's true if you already have the pot and move it in.

But I still think for the average person the increase is of limited appeal when they can't even save the current cash ISA limit.

I'm on a decent salary and still struggle to fill a S&S ISA each year.

It's welcome for a couple who wish to move ISA savings and nvestments from one to the other.

ceredigion

Scarpacci wrote: »

Err, every tax payer could benefit from shielding their savings from tax. The 20% tax payers will still benefit by, well, 20%! Losing 20% might be better than losing 40%, but it's a damn sight worse than losing 0% - so ISAs are as much for basic rate payers. Whether people are earning 1%, 3% or 5% - getting to keep 100% of the interest is obviously better than keeping 60% or 80% of it. You could argue it's even more important in times like this not to have the taxman taking his cut.

I also can't understand the attitude that cash savings are inherently worse right now because of the interest rates. Cash will always be a loser. It would be no better to have 3% interest rates and inflation at 4%, than it is to have 1% interest rates and 2% inflation. In the long term cash will always lose out, all the more so if the taxman's taking a cut. Still, people generally need to build up some cash savings - so it's generally for the better that they can build this away from the taxman's prying hand.

think what mikemoate was getting at , is most basic rate tax payers are better off paying the tax on 3% than they are with their money tax free in an isa wrapper. Personally , think it has more to do with the banks setting the rates at a point where theres nothing in it either way which means they benefit than the isa money more than the saver.

zagfles

jimjames wrote: »

That's true if you already have the pot and move it in.

But I still think for the average person the increase is of limited appeal when they can't even save the current cash ISA limit.

I'm on a decent salary and still struggle to fill a S&S ISA each year.

For people who aren't going to fill it they can use it for short term savings eg for holidays, Christmas etc.

ceredigion

zagfles wrote: »

For people who aren't going to fill it they can use it for short term savings eg for holidays, Christmas etc.

yeah, but why would you when you can get 3,4,5% instant access pay the tax and still be better off

zagfles

ceredigion wrote: »

yeah, but why would you when you can get 3,4,5% instant access pay the tax and still be better off

They usually have quite low limits for interest. I suppose you could open a few of them, but I wonder how long this trend of high interest/low limits on current accounts will last? Banks seem to be having a price war to get peoples' current accounts but I can't see them paying interest at way above base rates for long.

The other thing for people on lower incomes is that taxable interest counts as income for tax credits but ISA interest doesn't.

mazybel

Am confused now .?? I earn £22000 approx. have £5350 ISA with Santander and £5750 with Coventry. Should i just put it in saving a/c instead ??

Scarpacci

ceredigion wrote: »

think what mikemoate was getting at , is most basic rate tax payers are better off paying the tax on 3% than they are with their money tax free in an isa wrapper. Personally , think it has more to do with the banks setting the rates at a point where theres nothing in it either way which means they benefit than the isa money more than the saver.

It's a reasonable point but I don't see it as reason to attack ISAs, or the increase in the allowance, as something that only benefits the rich, as the poster did. The situation with current accounts is unusual and who knows how long it will last. Surprisingly, there are even current accounts out where which would beat instant access ISAs for higher rate tax payers, too, so I still don't think ISAs can be portrayed as something for the rich. Still there is a cumulative benefit to shielding money away from tax which, in the years ahead, will benefit anybody able to save in an ISA. Current accounts are good for now, but I think cash will usually be better placed in an ISA sooner or later.

opaque

Archi_Bald wrote: »

The £85K FSCS limit per person per financial institution for savings is entirely unaffected by yesterday's budget. So is the FSCS limit for investments (£50K) even though the nature of it is entirely different to the cash protection one.

You are not forced to keep all your ISAs with one provider, nor are you forced to keep all your cash in a single cash ISA, or all your investments in a single S&S ISA.

No but the point is that in the new tax year under the new scheme you could move £15,000 of cash to another provider/license in one go which would have taken you 3 years before
Good way of shifting money around. More % back would of course be great but in terms of 'protecting' your money this is a great deal.
If you have that sort of money of course!

gadgetmind

opaque wrote: »

No but the point is that in the new tax year under the new scheme you could move £15,000 of cash to another provider/license in one go which would have taken you 3 years before

You can move your entire ISA savings between providers without any government restrictions. The restriction is on how much *new* money you put into ISAs per annum.