MSE News: Torn between easy-access and fixed cash ISAs? Find out how to open both 27 May 2014 at 6:15PM in ISAs & tax-free savings 9 replies 2.3K views

Former_MSE_Helen

Aldermore, Kent Reliance, Nationwide and Newcastle building societies now allow savers to split their ISA allowance...

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Torn between easy-access and fixed cash ISAs? Find out how to open both



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innovate

MSE_Helen wrote: »

Aldermore, Kent Reliance, Nationwide and Newcastle building societies now allow savers to split their ISA allowance...

Not news, they have been doing this for ages. But none of their rates justify even just a penny in these ISAs, unless, possibly, you are terribly desperate to make use of the £15K allowance. In all cases, the ISAs listed in the article will lose you money because they do not even pay the inflation rate.

MSE, why don't you mention inflation? Why do you encourage people to lose money? Why don't you mention that cash ISAs (instant access or fixed) are, based on historical evidence, a worse choice than S&S ISAs? Why don't you distinguish between people who can max their annual ISA allowance and those who can meet just about 10-15% (or however much) of it?

There was a post today from someone who can put away £200 a month - probably not an unrepresentative amount for the vast majority of people. It would take them 6+ years to use up their annual ISA allowance with this amount of monthly savings. Why encourage these people to even consider a cash ISA at the current rates? The only valid reason I can think of is that if their CRA records are shot to bits and they are unable to get a current account....in which case, they are probably not able to save any money anyway, so those people don't exist.

It's a shame that cash ISAs still get promoted by MSE without much qualification these days. It is progress that there is mention of current accounts at the end of the article, but there seems to still be this obsession with putting money into an ISA each year. Using all or part of the annual ISA may make sense for many people, but not for everyone. A thoroughly researched article about ISAs should start with a decision tree for whether an ISA, and which sort of ISA, is right for you, and when you should consider the relevant kind of ISA, not with whether you should have an instant access or a fixed term cash ISA.

I hope people will read the forum and realise there's more to being money savvy than plonking your cash into a cash ISA.

MSE, have you considered establishing an expert panel of selected forum users to help you with your articles?

jimjames

innovate wrote: »

MSE, have you considered establishing an expert panel of selected forum users to help you with your articles?

I think that would be a really good idea. I'm sorry to say that there does seem to be far more real life practical advice on best options from regulars on the forum than the official MSE articles.

This is a perfect example of why promoting ISAs with no provisos is a really bad idea.

http://forums.moneysavingexpert.com/showthread.php?p=65636050

Vortigern

M&S ISAs have allowed this split between instant and fixed for some time now and they still do. Why is M&S not mentioned in the article?

Their rates are poor, but no worse than many others.

Perelandra

innovate wrote: »

A thoroughly researched article about ISAs should start with a decision tree for whether an ISA, and which sort of ISA, is right for you, and when you should consider the relevant kind of ISA, not with whether you should have an instant access or a fixed term cash ISA.

This is a great idea.

Former_MSE_Helen

Thanks for flagging Vortigern, the article has now been updated to include M&S.

vectistim

MSE_Helen wrote: »

Thanks for flagging Vortigern, the article has now been updated to include M&S.

Never mind tinkering at the edges with provider details - what about the more fundamental questions raised in this thread?

jimjames

vectistim wrote: »

Never mind tinkering at the edges with provider details - what about the more fundamental questions raised in this thread?

Absolutely.

Yet again the 5% info is tucked right at the end of the article - it should be at the beginning. This is meant to be a site for helping people make the most of their money. Most people do not have £40k in ISAs that they need to worry about, the average small saver at the moment does not need to bother with an ISA at all if they want to get the best return. The article does not make that clear at all.

EDIT - just seen that MSE are promoting a BTL guide. Surely if you can put the effort into producing that then you could at least get the cash ISA and S&S ISA to be worthy of your readership?

http://www.moneysavingexpert.com/mortgages/buy-to-let-mortgage?utm_source=MSE_Newsletter&utm_medium=bignote-one&utm_term=27-May-14-lt&utm_campaign=mortgages&utm_content=2

Herbalus

Martin's explanation of ISAs vs current accounts, and his view on why ISAs are better long term. For the average punter, who hasn't the inclination to get several current accounts (we all know how many threads there are entitled "how many current accounts can I have?"), this may well satisfy them. You might not agree with it, but it should offer an explanation as to why MSE feel that ISAs are still worth pushing.

I hope anybody who reads the article can digest the information given, and then work out for themselves what the best course of action is*. If people are blindly following information they are essentially spoon-fed, are not taking responsibility for their financial decisions, and will end up on the forum, confused and not having read the T+Cs for interest paying accounts, complaining about not getting interest. I was pleased to see the following sentence, albeit at the very end of the article, which does at least imply some responsibility on the part of the reader:

But you need to weigh up what's more important to you – higher interest rates now, or building up cash that stays tax-free year after year.

*As an example, I don't see how so many people ask the question "why should I put money in an ISA if a current account pays 5%?" - 5% is better than 1.5%, so get a current account. Does it make me unfriendly or harsh if I don't feel like this should have to be pointed out?

book12

The Post Office started to allow customers to split their ISA allowance between an easy access and a fixed rate one.

More details here: http://www.postoffice.co.uk/savings-accounts/online-isa


Please update the article accordingly.