Stocks & Shares ISAs

Brand

Brand wrote: »

Yes the rules allow flexibility for ISAs to be split, but in practice the providers don't.

PS . . . even if the transfer form appears to enable you to split. (It is just in case the outgoing provider happens to have kept years separate, and it does not of course does not entail or commit the new provider to preserve the separation.

The iWeb thread, on which snowman has commented, http://forums.moneysavingexpert.com/showthread.php?t=4865441&highlight=iweb I thought was very useful to show you what you can and cannot do with funds with that particular "barebones" stockbroker-basedISA. (Down their list of funds for example, are Institutional classes at 0% p.a., which you can't buy, and you could easily select the wrong fund, or buy a fund when you really want an ETF etc.)
As I have been trying to convey, from July onwards we are in the hands not of the Chancellor but of the market, and must no longer think of a "Cash" ISA or a "Stocks and Shares" ISA, as there is but a single thing called an ISA (or NISA) and we have to think what primarily we want to put into it: cash, funds, or shares. The features of each depends upon the provider, so an ISA with say Coventry is going to be a Building Society ISA, which will specialise in cash.
An ISA with Cavendish or Hargreaves Lansdown will specialise in funds, so prefer not to go to them if you want to buy shares.
Meanwhile an ISA with a stockbroker such as x-o.co.uk or iWeb.co.uk will specialise in shares (incl ETFs and InvTrusts) If you want the occasional fund, then a better choice might be An ISA with a (very slightly) pricier stockbroker such as Interactive Investor, AJBell youinvest , Share Centre though again you could simply keep an ISA spare to run with Cavendish, which specialises in funds.
The real point of interest for he future is if, say, Santander team up with Cavendish to provide a fund facility within a single ISA or, more obviously, if Halifax links its stockbroking arm to provide a share facility within a single ISA. I can imagine the marketers branding these a Flexi-ISA or even ( we hope not! )SuperISA. The extra charge for an annual fee would then be balanced by the interest on the waiting cash. The standard opinion would then be: other things being equal, don't go for a stockbroker ISA and don't go for a fundprovider ISA, but prefer the more flexible Flexi-ISA.

jimjames

Brand wrote: »

As I have been trying to convey, from July onwards we are in the hands not of the Chancellor but of the market, and must no longer think of a "Cash" ISA or a "Stocks and Shares" ISA, as there is but a single thing called an ISA (or NISA) and we have to think what primarily we want to put into it: cash, funds, or shares. The features of each depends upon the provider, so an ISA with say Coventry is going to be a Building Society ISA, which will specialise in cash.
An ISA with Cavendish or Hargreaves Lansdown will specialise in funds, so prefer not to go to them if you want to buy shares.

That really is no different from now. You have a single ISA limit and can have cash or S&S in it. We are in the hands of the market now not the chancellor. I'm afraid I don't understand the logic as everything you mention is already in place. It does sound like your a cash ISA saver and haven't used S&S ISAs before but they work in this way now and that is unlikely to change from this new rule.

I can't see any difference coming in July other than you can now move S&S back to cash which you couldn't before. The current limit is £11880, the new limit £15000. That isn't a very big increase and most people use a tiny amount of their allowance anyway so the increase will be irrelevant to them.

For example Santander already offer funds in their ISA so there would be no benefit to them from changing that to offer other providers - that will lose them margins.
HL are big for selling and buying shares so do have that flexibility that Cavendish do not.

masonic

Brand wrote: »

PS . . . even if the transfer form appears to enable you to split. (It is just in case the outgoing provider happens to have kept years separate, and it does not of course does not entail or commit the new provider to preserve the separation.

Where do you get that notion from? At the moment, if I have, say £20,000 in a single ISA with ISA manager 1, I can fill out a transfer form to ISA manager 2 for a partial transfer of £5,000, a second transfer form to ISA manager 3 for £12000, and a third transfer form to ISA manager 4 for the remainder if I wanted to do so. It does not require the the outgoing provider to keep the annual contributions separate and the annual contributions for past tax years can themselves be split. The only stipulation is that contributions for the current tax year must not be split up. I don't think that is going to change.

PoorPaul

Sorry MSE - I appreciate it is a 'first incarnation' but to someone like myself who really doesn't understand much about Stocks and Shares ISAs, which I believe is the target audience, this new guide is wide of the mark.

I have been paying in to a S&S ISA with the Halifax for years, as has the wife with the Co-op. Not because they were the best options, but because they were 'convenient' and considered 'better than nothing' at the time. The Direct Debits are taken each month, and they have virtually been forgotten about.

But now we are thinking... the Co-op are in trouble, Halifax are never top performers, so how much better off would we have been if we had put more effort into S&S ISAs - or at least, the same amount of effort we put in to choosing Cash ISAs?

But the information has never been there - or easy to find and understand - as it is for Cash ISAs.

I would guess that the majority of S&S ISA holders are in a similar position, having taken the 'easy route' with someone they already use for other products (banking, saving etc).

To me, the new Guide doesn't help those of us with only basic knowledge of the products much at all.

Much of the chat on this thread is so far over my head it is frightening! Did I stumble into the 'Advanced' section ?!?! :eek:

Here's hoping the 'second incarnation' comes right back down to earth and provides information the average person can use to good effect.

In the meantime, our Direct Debits will keep feeding the (most likely) underperforming but easy to manage S&S ISAs we hold......

innovate

PoorPaul, have you ever looked outside MSE for S&S ISA information? There is a huge amount of superb information available. Starting from books and websites on investing, to articles in the broadsheets, and even in the tabloids, describing in very simple terms how you get going with S&S ISAs. It is a sad fact that they are all a lot better than the recently published MSE article.

As to your Halifax S&S ISA not performing........what are you investing in? Halifax Sharedealing offer the same umpteen-thousand funds and stocks the other big platforms offer. The performance of funds and stocks is independent of platforms. The difference is usually the platform charge but Halifax charges are surprisingly modest and competitive. So you either have some dud investments, or your expectations are too high, or the way you invest isn't efficient (e.g. too many trades).

PoorPaul

innovate, thanks for the reply, no I haven't ever looked for S&S ISA info anywhere to be honest.

As I made an allusion to above, call it laziness, complacency or whatever, but at the time of taking out the Halifax S&S it was as easy to apply for as it was for a Cash ISA - and I never recall any real choices or options as to choosing between funds, stocks etc. The wife says it was the same experience when she started the Co-op ISA.

I appreciate those of you with significantly more financial knowledge than I (and I'm sure the 'average' person) would be able to easily tell how a particular ISA is performing but none of it is easy or clear to me!

What am I investing in? Haven't a clue!
Do I have dud investments? Wouldn't know how to determine!
Are my expectations too high? Would just like to know I haven't been wasting time & money!
Is the way I invest efficient? Erm....! lol

I KNOW I'm not the only 'man on the street' who really doesn't understand all this malarky. Perhaps I'd have been better just sticking to straightforward savings products rather than half-hearted investments shenanigans!

masonic

PoorPaul wrote: »

What am I investing in? Haven't a clue!
Do I have dud investments? Wouldn't know how to determine!
Are my expectations too high? Would just like to know I haven't been wasting time & money!
Is the way I invest efficient? Erm....! lol

I KNOW I'm not the only 'man on the street' who really doesn't understand all this malarky. Perhaps I'd have been better just sticking to straightforward savings products rather than half-hearted investments shenanigans!

This is rather like wanting to go on holiday, and deciding to book something with a familiar travel agent you see on the high street. You probably have a discussion about popular resorts and they make some recommendation, which you agree to, but you come away not knowing where you're actually going. I'd be somewhat uneasy about that. You could find yourself in the Crimea. :eek:

innovate

Sorry PoorPaul, I had assumed you had an S&S ISA since you posted in this thread. But I now gather you have a cash ISA, and I do understand why you are saying it has not performed very well. You need to, in essence, move your cash ISA every year or two to keep up with the best interest rates. But even the best cash interest rates are pretty carp these days, and for many people, it makes sense to just completely forget about cash ISAs and instead go for current accounts.

There is no single answer for everyone - your best course of action depends on your total existing savings/investments, your planned savings/investments, the duration you want to save/invest for, what your attitude to risk is, and what state your CRA files are in (essential question is whether you would be accepted for several current accounts).

If you can post a quick set of answers to these questions, you can get a quick set of suggestions on what you could be doing. Alternatively/additionally read the forum, and read some other sites, such as monevator.com or the personal finance pages of the newspapers or Which? - the information is all out there, ready for you to get! The ultimate decision is yours at the end of the day

jimjames

PoorPaul wrote: »

What am I investing in? Haven't a clue!
Do I have dud investments? Wouldn't know how to determine!
Are my expectations too high? Would just like to know I haven't been wasting time & money!
Is the way I invest efficient? Erm....! lol

I KNOW I'm not the only 'man on the street' who really doesn't understand all this malarky. Perhaps I'd have been better just sticking to straightforward savings products rather than half-hearted investments shenanigans!

It's always interesting to get different views on things and when you've been immersed in investments for the last 16 years or so it's very easy to forget how little you knew at the start and that other people are at that stage.

Without having recommendations for different funds it would probably be quite hard to include that much information but the basics such as differences between trackers and managed funds, bonds and shares would probably be useful to help newcomers out.

Your first port of call is to read the statements that you will have received for your ISA. On there it will say exactly which fund you are invested in. I'd imagine it would say something like Halifax FTSE100 index Acc or something like that.

That means it is a Halifax fund that tracks the FTSE100 index and you own accumulation units that automatically reinvest all the income inside the fund. The other option are INC units that can pay out the income or use it to buy more units of the fund.

Even writing that I was then thinking - what is a fund, what is a unit... so if you are struggling then that's probably a good place to start to research so you understand how funds are constructed.

innovate wrote: »

Sorry PoorPaul, I had assumed you had an S&S ISA since you posted in this thread. But I now gather you have a cash ISA, and I do understand why you are saying it has not performed very well.

From the info posted it does appear to be a S&S ISA, just ones that contain unknown elements.

confused_and_green

I am finding the information too much for a novice in general and reading this thread and all the other information and links I feel no wiser.

I am sure I find myself in a position very similar to others. I have been investing in a S&S's ISA through Fidelity since 1999, this was set up by an IFA I was introduced to when I took out a mortgage. The mortgage was interest only hence the ISA was to pay off the capital at the end.

My situation changed many years ago and I now have a capital and interest mortgage but I just kept the payments rolling on to help supliment my pension, as I was a late starter.

My holdings were all with Fidelity and included Japan, European Opps, UK Growth, Money Builder Global and looking back some of these had higher initial charges, AMC's etc but I didn't know any better at the time. Now finding myself with a little more time I have been looking into the costs v performance and I intend to try and reduce some of the costs and change some of the funds. I intend to move to Cavendish on line having read the article in the 1st instance and want to continue to drip feed into the ISA.

The way I feel at the moment I am tempted to see an IFA however based upon this past experience and that of my family I am reluctant to do this.

What I would like to achieve is to accumulate some funds for my daughters Uni fees/house deposit which are probably 10 & 14 years away but I don't know the best way to go about this. A lot of the articles in the papers don't go into enough depth and I am interested in the passive portfolio. My risk appetite is Medium as I have other savings and will probably use the max allowance this year and next year but probably stop after that.

Any guidance would be greatly appreciated even if its just saying go and see an IFA !

thanks