Stocks & Shares ISAs

planteria

you are clearly right about the decision-making process here, innovate, but..

innovate wrote: »

As you would expect, I totally disagree. I also do not like to get misquoted, so please do check before you claim I said something that I did not say.

i did have to giggle, after some of your comments about me you can't really ride that particular high horse;)

planteria

innovate wrote: »

Not sure why people think there will be much change in July - ok, may be some of the S&S providers might offer better rates for cash holdings though I doubt they will because interest rates remain in the doldrums.

IMO, there will be zilch changes of any significance to S&S ISAs in July (apart from the higher limit and transfer to cash option) since the investment world will be totally unaffected by the fact that people can put a few K more into a tax shelter.

totally agree. i don't think there is anything to wait for. and cash within a S&SISA will remain no/low interest for the foreseeable.

planteria

masonic wrote: »

One factor, which might be of interest to a few, is if a provider decides it is not willing to accept partial transfer out requests, which could make it difficult for those wishing to pile money into S&S with a view to later converting some of it back to cash and chasing the best cash ISA rates with it.

that is an interesting point. i suspect that the increased flexibility allowed will prompt ISA providers to allow such moves though.. ISAs in general are becoming more significant wrappers for Cash, Funds and Shares, and enough providers are going to want to hold saver's/investor's funds.

masonic

planteria wrote: »

that is an interesting point. i suspect that the increased flexibility allowed will prompt ISA providers to allow such moves though..

Perhaps, but I wouldn't count on it. As you know, certain money-grubbing S&S ISA providers are already raising the barriers to people leaving them. A useful amount of revenue already comes from uninvested cash on people's accounts earning the ISA provider interest. I don't expect that'll all be passed on and so they may wish to make it difficult for people to easily move that money to a better product on a whim. I could see certain providers making it an all or nothing transfer, knowing most people would be too apathetic to move all of their investments as well as cash.

Brand

innovate wrote: »

Sounds like a typical "shoot - ready - fire - aim" approach to me

. . . . And particularly now that it is possible to transfer from S&S to cash.

Brand wrote: »

Yes, though it's not "now", it's July, so why not wait til then, so no costs incurred until then, and the providers revamp their offering perhaps?

I start from the assumption that the core MSE saver has a preference for cash ISAs over Stocks and Shares, but would not mind some flexibility to switch partly to shares later, possibly (or possibly not), and so he/she will try to have £5,940 already in a 2014-2015 cash ISA and now in April 2014 be asking if the £5,940 S&S allowance already available is of any use to act now. What I find illogical is to suggest to that reader to open a S&S ISA now, with all its costs and constraints,and then in July you can switch it to cash. Even more illogical from the point of view of flexibility would be to put the £5,940 into a pre April S&S ISA. into If I had one quibble with the very good MSE article it is to suggest to people to take the April offers before they expire. There is no rush, the April offers have tie-ins, and why not expect there could equally well be July offers? the only case for putting the early 2014-2015 £5,940 into a S&S ISA are those people who are determined to keep fully invested - even into one of the historically worst stockmarket months of the year -and are happy with their choice of their S&S ISA provider (s) for the longer term. Some contributors seem to talk as if July is the end of a new tax year, but it is not It is, though, a new one-off ISA season. All we know of July for our new top-up money is that we remain restricted for to two ISA providers this tax year, and the core MSE reader may have made a choice of one of them already, for their cash ISA, so why make a choice of the second one already, with running costs, before even knowing what is on offer in July?

Brand

planteria wrote: »

totally agree. i don't think there is anything to wait for. and cash within a S&SISA will remain no/low interest for the foreseeable.

You make a good point, and the ISA providers have revamped their stalls this year, and may not change much at all, and that providers who remain basically stocks and shares ISA providers will provide little in the way of interest. I am merely suggesting there is no rush to use the £5,940 S&S allowance now, so wait and see, as the attraction of the £5,940 plus the July top up £3,120 means that there is significant money for the banks and other ISA providers to gun for, in particularl at either a good savings interest rate or a good hybrid offering enabling stocks and shares investment, a decent interest rate and easy switching. If you were in charge of a bank, you'd have to be considering these things. In addition, those hargreaves lansdown customers not annoyed at hearing of the transfer delays will be shocked when the hidden fees suddenly appear transparent on their statements. There is also therefor to be won the huge queue of h-l customers making a decision where to house their their huge pile of investment money for the next decade, so that is the second reason why I think the ISA offerings may be revamped for July. I could be wrong, but why not wait and see?

jimjames

Brand wrote: »

I start from the assumption that the core MSE saver has a preference for cash ISAs over Stocks and Shares, but would not mind some flexibility to switch partly to shares later, possibly (or possibly not),

You can already switch your cash ISA to S&S, that has been the case for a number of years. The rule that has changed is to allow a switch from S&S back to cash.

Brand wrote: »

IWhat I find illogical is to suggest to that reader to open a S&S ISA now, with all its costs and constraints,and then in July you can switch it to cash. Even more illogical from the point of view of flexibility would be to put the £5,940 into a pre April S&S ISA. into If I had one quibble with the very good MSE article it is to suggest to people to take the April offers before they expire. There is no rush, the April offers have tie-ins, and why not expect there could equally well be July offers? the only case for putting the early 2014-2015 £5,940 into a S&S ISA are those people who are determined to keep fully invested - even into one of the historically worst stockmarket months of the year -and are happy with their choice of their S&S ISA provider (s) for the longer term. Some contributors seem to talk as if July is the end of a new tax year, but it is not It is, though, a new one-off ISA season. All we know of July for our new top-up money is that we remain restricted for to two ISA providers this tax year, and the core MSE reader may have made a choice of one of them already, for their cash ISA, so why make a choice of the second one already, with running costs, before even knowing what is on offer in July?

Have you ever taken out a S&S ISA? It does appear from your comments that your knowledge of S&S ISAs is rather limited and you haven't read answers already posted to your questions.

I cannot understand your suggestion of why anyone would take out a S&S ISA now and then transfer to cash in July. You may want the flexibility in future but as S&S ISAs are designed for 5 years plus that decision is some years away.

As already pointed out the S&S ISA limit is £11880 this year. Unlike cash ISAs there is no season for S&S ISAs as such and deals do not differ depending on the time of year. The only (one off) difference this year has been the implementation of RDR which has required providers to change their pricing. This is a one off and nothing to do with the changes later in the year.

For S&S ISAs there is far more sense in investing throughout the year so you benefit from pound cost averaging paying in every month. In most cases S&S ISA fees are paid for as a percentage so it makes absolutely no difference if you take one out now or later, it is not always a fixed cost.

There are no April S&S ISA offers and I cannot see any reason why there would be July offers either. I'm not aware of any tie ins either, please can you provide any info of ones you are aware of?

The limit for S&S ISAs changes from £11880 to £15000 in July. For most people investing in a S&S ISA that is a pretty small increase and wouldn't make any difference to their investment plans. You might also want to consider that in my view a cash ISA is totally pointless at the current time and anyone taking one out now looks to be making a big loss compared to the rates they can get elsewhere so to me it wouldn't make sense to have a cash ISA until next year.

It would help if you can provide examples to back up your claims. From an initial read it does seem that you do not really understand S&S ISAs and the comments could cause confusion for those who have not invested before.

jimjames

Brand wrote: »

You make a good point, and the ISA providers have revamped their stalls this year, and may not change much at all, and that providers who remain basically stocks and shares ISA providers will provide little in the way of interest. I am merely suggesting there is no rush to use the £5,940 S&S allowance now, so wait and see, as the attraction of the £5,940 plus the July top up £3,120 means that there is significant money for the banks and other ISA providers to gun for, in particularl at either a good savings interest rate or a good hybrid offering enabling stocks and shares investment, a decent interest rate and easy switching. If you were in charge of a bank, you'd have to be considering these things. In addition, those hargreaves lansdown customers not annoyed at hearing of the transfer delays will be shocked when the hidden fees suddenly appear transparent on their statements. There is also therefor to be won the huge queue of h-l customers making a decision where to house their their huge pile of investment money for the next decade, so that is the second reason why I think the ISA offerings may be revamped for July. I could be wrong, but why not wait and see?

Many people with a S&S ISA will already have a provider from previous years. Unlike cash ISAs there is no annual "move your money to chase the best rate" merry go round, you choose a provider and pay in over a number of years building up a portfolio of funds or shares paying a fee for that service. Some HL customers may be surprised by the fees they are paying but they will pay fees elsewhere too so that staying where they are may work out better for them depending on portfolio size. For most S&S ISA providers July is a non-event, for HL the new charges will already be in place so anyone moving will pay handsomely for that option. Now is the time to move if at all.

There may be some changes in July but I think they will be small. S&S ISA providers are unlikely to be offering the best cash ISA rates but I expect they will be higher than those paid on cash in a S&S ISA currently. Banks may offer higher cash rates but will continue to be a very poor choice for S&S ISAs.

So you have 2 conflicting issues from July. You can get the best S&S ISA or the best cash ISA but they will not be from the same provider. No different from the situation now really, the only change is that you can move some S&S ISA money back into a cash ISA.

masonic

jimjames wrote: »

There are no April S&S ISA offers and I cannot see any reason why there would be July offers either. I'm not aware of any tie ins either, please can you provide any info of ones you are aware of?

In fairness to Brand, I think it is the MSE article that first introduced this notion of April S&S ISA offers in section 6...

Should I wait until July? If you want to take advantage of providers' April offers you'll need to open your shares ISA now and not wait until July.

It's pretty clear as to when people would be best opening/putting money into ISAs:
Cash: Open around April to secure the best offers, and fund as late as possible in the tax year if better rates can be obtained outside the ISA (which is currently the case for most people).

S&S: Open when you are ready to start investing, and fund according to your own view of risk (either drip-feeding to avoid excess volatility or invest as soon as possible to minimise the opportunity cost of being out of the market).

...and you should not invest any money in S&S that you don't intend to keep invested in S&S for several years, or add new cash to S&S ISAs that you don't plan to invest since they pay such low rates of interest (that is currently also taxable).

jimjames

masonic wrote: »

In fairness to Brand, I think it is the MSE article that first introduced this notion of April S&S ISA offers in section 6...

Curious to know what these offers are!

However as S&S ISAs are for long term investments I'd be very wary of any short term offer to tempt you to sign up in a particular month when you may be holding those investments for 10 years or more.