Best £50k ISA

50Twuncle

Right - so let me get this straight
We are currently holding approx £50k each in a combination of cash and s&s ISA's - and in July, the rules are changing to allow as much as wanted of the whole amount to be converted to either cash or s&s ?
Our current position is that the company who hold our savings is losing money on the ISA's (mainly due to "charges") and gaining (slightly) on the outside of ISA investment....
This appears to me to be a waste of tax free savings !!

grey_gym_sock

you can already transfer a cash ISA to a different cash ISA, or an S&S ISA to a different S&S ISA, or a cash ISA to a S&S ISA.

the only thing that changes in july is that you'll also be able to transfer a S&S ISA to a cash ISA.

so if you want to switch providers, you can at least make a start now. if you want to move some of your S&S ISAs to cash ISAs, that bit will have to wait till july.

bowlhead99

50Twuncle wrote: »

Right - so let me get this straight
We are currently holding approx £50k each in a combination of cash and s&s ISA's - and in July, the rules are changing to allow as much as wanted of the whole amount to be converted to either cash or s&s ?

Yes

Our current position is that the company who hold our savings is losing money on the ISA's (mainly due to "charges") and gaining (slightly) on the outside of ISA investment....
This appears to me to be a waste of tax free savings !!

I *think* what you're saying here is that:

• 1) you have ISAs which are mixed cash and S&S all with one provider. Perhaps each year you did 50:50 into the cash and S&S component. Or perhaps sometimes you did more on S&S.

But basically as far as I can see, you have a cash component which could be transferred to another cash ISA provider and a S&S component that could be transferred to another S&S provider.

• 2) You seem to be getting hung up on the fact that "the highest paying providers limit saving with them to 15k."

People offering cash ISAs will generally have multiple products and the highest paying ones are often reserved for people paying in new money (15k being the current year allowance). So for example Nationwide have a normal instant access saver paying 1.5%. You can transfer as much as you like from other providers into that pot. But their 'flexclusive' ISA account for people with a current account with them, pays 1.75%. Unfortunately it is only for new money, so the most non-ISA money you can move into it in 2014/15 will be capped at 15k.

So if you have say 30k each existing cash ISAs, and wanted to use Nationwide, you would have to take the lower rate product. Of course you can shop around providers to find one that has a better rate on transfers in. Birmingham Midshires would take a 30k transfer and happily give 1.65%. If you are willing to lock your cash up for 18months rather than have instant access, Halifax would take a 30k transfer and happily give 2%.

So, you might find that, although the very highest rates are for new 2014/15 contributions, you can still do better by moving your cash from your existing provider who might only be giving you <1% on the cash component of what you have with them.

• 3) You also have some cash (and maybe some stocks and shares investments?) outside an ISA with the same provider. You mentioned you are earning more on this non-ISA stuff than you are on the stuff inside the ISA. In fact, while the stuff outside the ISA is going up (slightly), the total you have inside the ISA is going down (which you think is mainly due to charges).

There are a couple of things here.

a) If the stuff outside the ISA is only going up 'slightly' (say 1% a year) then why keep it with that provider?

Between you and your wife you could put tens of thousands into the highest paying current accounts from a variety of banks and building societies and earn 3%+ on it.

Alternatively if it is long term money that you don't need for a number of years (and are just eventually going to put into the S&S ISA pot once you have enough allowance to do so), you could think about using S&S investments. Most mixed asset S&S investments have gone up more than 'slightly' over the last few years although of course they go down from time to time. Maybe some of your non-isa stuff is in S&S already? If it is in S&S but hasn't been going up, take a look at what it is invested in and consider the options from your existing provider or others.

b) You say the ISAs have been going down, mainly due to charges. But this is a mixture of cash and S&S. And cash does not attract any significant charges with most providers (you have seen the examples of the net rates offered on the high street I mentioned above, which are all positive returns). So, the charges are really driven by the S&S side, right?

So, you are getting negative returns on your S&S after charges and you think it is mainly the fault of the charges. Obviously, one thing to do would be to look at other providers with lower charges. However the main question to ask is why the investment returns are so low as to be in a position where some charges could take them negative. Has this been the case for the last few years, or are you just looking at a snapshot for the total return over the last few months? If the latter, it's perfectly possible to have got a very low return because investment values don't always grow in a straight line.

Other people have asked what investment funds the S&S money has been invested in, or who the provider is, and you haven't replied. If you don't know what investments the S&S money is in, is it possible that you misunderstand the reason for the value going down, and you think it is 'charges' from your provider but actually it is just the prices of shares in the market are falling? This is perfectly possible depending on what timescale you are looking at, although over a longer period, like the last 5 years, you would expect them to be significantly up.

50Twuncle

bowlhead99 wrote: »

Other people have asked what investment funds the S&S money has been invested in, or who the provider is, and you haven't replied. If you don't know what investments the S&S money is in, is it possible that you misunderstand the reason for the value going down, and you think it is 'charges' from your provider but actually it is just the prices of shares in the market are falling? This is perfectly possible depending on what timescale you are looking at, although over a longer period, like the last 5 years, you would expect them to be significantly up.

At the moment - our S&S money is invested in a variety of companies - ranging from Starwood & GPC infrastructure to Polar Capital fund & GPC Student Living org - the company who we are using is a Discretionary Investment Management Company - as recommended by our F.A (Who was given over £4000 by the company as an introduction fee - paid for by us - plus ongoing fees of around £1500 pa - same as management fees - so we need to make at least £3000 pa before we see any gain at all)
We previously made around £25k in the last 4 years when invested in a different company - that's right through the depths of the recession !!
Does this sound acceptable ?

jimjames

50Twuncle wrote: »

At the moment - our S&S money is invested in a variety of companies - ranging from Starwood & GPC infrastructure to Polar Capital fund & GPC Student Living org - the company who we are using is a Discretionary Investment Management Company - as recommended by our F.A (Who was given over £4000 by the company as an introduction fee - paid for by us - plus ongoing fees of around £1500 pa - same as management fees - so we need to make at least £3000 pa before we see any gain at all)
We previously made around £25k in the last 4 years when invested in a different company - that's right through the depths of the recession !!
Does this sound acceptable ?

To me it sounds like a bizarre bunch of high risk investments that appear to be chosen for their fees not for your benefit. Is your FA regulated? I find it hard to believe that they would be based on those investments.

£4000 intro fee is amazing, that must be 20% of your investment if half of the £50k is in cash? I wouldn't make any hasty decisions but paying what you are for the investments you have doesn't look like great investing to me.

50Twuncle

jimjames wrote: »

To me it sounds like a bizarre bunch of high risk investments that appear to be chosen for their fees not for your benefit. Is your FA regulated? I find it hard to believe that they would be based on those investments.

£4000 intro fee is amazing, that must be 20% of your investment if half of the £50k is in cash? I wouldn't make any hasty decisions but paying what you are for the investments you have doesn't look like great investing to me.

Yes the FA is registered
It was around 2.2% of the original investment
We had about £100k in ISAs and £75k out of ISA

dunstonh

At the moment - our S&S money is invested in a variety of companies - ranging from Starwood & GPC infrastructure to Polar Capital fund & GPC Student Living org

Those are not really investments. They are high risk speculative punts. Totaly unsuitable for the average UK retail consumer. The sort of thing that goes bump in the night.

Does this sound acceptable ?

No. The recommendations are poor and I would actually be on guard as one area of scam/dodgy dealing/bad behaviour is for an adviser to recommend the wrapper (ISA in this case) but then pass the decision to a third party who recommend unregulated or speculative investment options which are totally unsuitable. The regulator has its eyes on this sort of thing at the moment.

50Twuncle

dunstonh wrote: »

Those are not really investments. They are high risk speculative punts. Totaly unsuitable for the average UK retail consumer. The sort of thing that goes bump in the night.



No. The recommendations are poor and I would actually be on guard as one area of scam/dodgy dealing/bad behaviour is for an adviser to recommend the wrapper (ISA in this case) but then pass the decision to a third party who recommend unregulated or speculative investment options which are totally unsuitable. The regulator has its eyes on this sort of thing at the moment.

Thanks - I will PM you shortly