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Cash ISAs will have lower interest than taxable accounts
FatherAbraham
Posts: 1,024 Forumite
The logical conclusion is that deposit-taking institutions will in the long run offer slightly lower gross rates on tax-free accounts, keeping some of the "tax benefits" for themselves.
The golden age of cash ISAs is over.
Warmest regards,
FA
The golden age of cash ISAs is over.
Warmest regards,
FA
Thus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...
THE WAY TO WEALTH, Benjamin Franklin, 1758 AD
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With a few exceptions, Banks/BS have always offered slightly lower rates on their ISAs compared to their taxable equivilent.0
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Agree, nothing fundamentally new.
People also forget to factor inflation into the equation. The relationship between ISA savings rates and inflation has always been broadly similar.
The other thing people seem to be forgetting when whinging about low interest rates is all the people who have mortgages to pay. If savings interest rates rise, so do mortgage rates. What benefit is it to society if thousands of home owners can't afford their mortgages any longer but some pensioners (me included) will get a few quid more interest?0 -
It's called financial repression.
http://en.wikipedia.org/wiki/Financial_repression
Basically, those who show financial responsibility by budgeting and saving are punished so that those who've borrow heavily (including the government) can degear.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It's called financial repression.
Perhaps that should be depression.....:)0 -
Despite me not being a borrower, I've done OK from it as I'm more of an investor that a saver. QE has pushed up asset prices and most of my cash is held index linked plus a little, so I can live with only earning 3% on my rainy day cash.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
I suppose those don't own a home and are unwilling to buy at at current prices, particularly in this part of the world where a modest flat can cost more than 15 years average gross wages, might say the benefit to them would be house prices falling to more sensible levels.Archi_Bald wrote: »What benefit is it to society if thousands of home owners can't afford their mortgages any longer but some pensioners (me included) will get a few quid more interest?
It's an ill wind and all that.0 -
I'm torn on this one. I see the miserly caused by high house prices but there is even more miserly caused by rapid corrections.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Would be a mistake to under-estimate just how painful corrections can be. I remember people in the 90s crash finding themselves trapped by negative equity in small flats with their deposits wiped out and no options for moving. For some, any plans for a family in a decent home were destroyed.gadgetmind wrote: »I'm torn on this one. I see the miserly caused by high house prices but there is even more miserly caused by rapid corrections.
At the same time, the current need for massive mortgages based on multiple salaries with no possibility of interest rates ever falling significantly from here and no immediate prospect of inflation reducing the debt could bring very similar problems.0 -
Speculator wrote: »With a few exceptions, Banks/BS have always offered slightly lower rates on their ISAs compared to their taxable equivilent.
I dispute the veracity of this claim.
Warmest regards,
FAThus the old Gentleman ended his Harangue. The People heard it, and approved the Doctrine, and immediately practised the Contrary, just as if it had been a common Sermon; for the Vendue opened ...THE WAY TO WEALTH, Benjamin Franklin, 1758 AD0 -
I just popped back in time using archive.org.
On MSE in March 2005 the top non-ISA was A&L Online Saver paying 5.35%. The best ISA was Northern Rock's 30-day notice cash ISA at 4.45%.
I'm not saying you're wrong, just asking for evidence.
Here is where I started.
https://web.archive.org/web/20050201000000*/http://moneysavingexpert.comI am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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