to ISA or not?

remorseless

I am sure the question has been asked million times! I am fairly new in the UK so not sure I get this ISA account yet...

If I am holding just cash (say saving for a house deposit) should I put it in an ISA account while it accrues interests?

Archi_Bald

Yes, you are right, it has been asked, and answered, a million times in one way or the other.

What you do with your money is down to you. A lot also depends on what your tax band is, and for how long you expect to be a UK resident for tax purposes.

If you want to spend it soon (say less than 5 years), with the current interest rates you might get a far better deal in high interest paying current accounts. You may or may not be able to get these accounts, and you may or may not want them since they involve extra hoops.

If you are thinking longer term, such as retirement planning, ISAs, and particularly S&S ISAs, and/or SIPPs, are likely to be a better choice.

Lots and lots to read on the forum and and in the papers.

remorseless

Thanks Archi Bald - I think you have answered the question pretty well and was exactly what I thought too! If I plan to use cash in the next year or so it won't matter much!
I kept seeing all these ads about ISA and rushing to it that I was starting to get worried!

Archi_Bald

There's some sort of a mad scramble going one at the end of the tax year since in years gone by, you could get quite decent interest rates in cash ISAs around this time. Bizarrly, the mad scramble is still taking place even though it's been hard to find a cash ISA with half decent interest rates for at least two years now.