MSE News: ISAs become bigger tax-free NISAs today – so what's changed?

jimjames

roddydogs wrote: »

But you can only get 5% taxed on small amounts, cant you?

Depends on your definition of small. For the 9 million people with no savings at all, a balance of £6500 in 5% accounts would be huge. Even for those with the average of £2000 this is well above the amount they have and unlikely they would call it a small amount.

Even with the numbers from Archibald earlier the average ISA balance could easily be accommodated in high interest current accounts.

jimjames

colsten wrote: »

To be fair, the article does mention in passing " although some top paying current accounts (where you need to switch bank accounts) do pay such high rates that in the short term, they beat ISA returns"

That may be true but I missed it in the small print.

What I didn't miss was the headline Most should grab cash ISAs at up to 2.75% A number crunch shows if you withdraw after a year, you'd effectively have got 1.85%,

This is totally misleading and very poor advice.

MOST people have under £2000 in savings so an ISA is certainly not something that "most" should grab when they can get 5% outside an ISA on that amount.

minislim

jimjames wrote: »

That may be true but I missed it in the small print.

What I didn't miss was the headline Most should grab cash ISAs at up to 2.75% A number crunch shows if you withdraw after a year, you'd effectively have got 1.85%,

This is totally misleading and very poor advice.

MOST people have under £2000 in savings so an ISA is certainly not something that "most" should grab when they can get 5% outside an ISA on that amount.

whats also misleading in the market place is most higher rate isa accounts restrict you to initial deposits or transfers and then stop you from paying in any more money.

most people dont have a lump sum they can just pay in straight away.

Archi_Bald

minislim wrote: »

whats also misleading in the market place is most higher rate isa accounts restrict you to initial deposits or transfers and then stop you from paying in any more money.

It is not misleading, it is T&Cs. Higher interest rates often pertain to fixed term accounts. It is normal for fixed term accounts, whether they are ISAs or normal savings accounts, to only allow a small number of deposits which must be made within a short time of account opening.