Knock on effect ?

teddysmum

A few weeks ago, we read that ISA rates have been cut, as people seek to take advantage of the new larger allowance.


Even before this, I decided that the ISA fixed rates weren't worth locking away money (didn't want to invest for over 12 months in case things changed for the better), so left money in a limited instant access account, as it offered 1.75% and I'm a non taxpayer.


Today , came a letter saying the rate is falling to 1.5% from September. That's an interest cut of nearly 15%, so we savers are still being hammered.

mgdavid

teddysmum wrote: »

A few weeks ago, we read that ISA rates have been cut, as people seek to take advantage of the new larger allowance.

Even before this, I decided that the ISA fixed rates weren't worth locking away money (didn't want to invest for over 12 months in case things changed for the better), so left money in a limited instant access account, as it offered 1.75% and I'm a non taxpayer.

Today , came a letter saying the rate is falling to 1.5% from September. That's an interest cut of nearly 15%, so we savers are still being hammered.

It's the choice we all have to make - you gambled and lost.

kidmugsy

Have you maximised use of interest-bearing current accounts?

teddysmum

I haven't lost anything, as nothing has been gambled. I have an ISA with a year to go, at a very good rate and have this year's allowance to use, should I choose. (It's the latter, which I opted not to use, as the offered one year ISA rate was less than my instant access account .)


The 1.75% account has been steady for 12 months, when other accounts dropped and as it's instant access I can close when I please. There is aslo the 'pensioners' ' bond to be considered.

I don't have any of the high rate current accounts yet, but may now consider. However, they seem to have very low amounts allowed for interest purposes and the hassle of making sure they are 'fed' would worry me in case somewhere in the chain a payment was delayed, thus voiding the offer.


I believe that, next year, people earning less than the £10500 allowance will be able to have an unbelieveable £5000 in interest tax free, so there will be little point in opening ISAs , then.


The point of my post wasn't to say I feel I've lost out, but that institutions have decided they don't want us investing more in ISAs, so cut the rate, but now seem to be taking the hatchet to other accounts,again, so there's even less chance of the hoped for improved deals.

talexuser

teddysmum wrote: »

However, they seem to have very low amounts allowed for interest purposes and the hassle of making sure they are 'fed' would worry me in case somewhere in the chain a payment was delayed, thus voiding the offer..

£40000 in 2 Santanders, with your cashbacks paying the £2 fee getting 3%. Then another £15000 in 3 BoS getting 2.96%. That's 55 grand with the transfers arranged between them on the same day by standing order requiring no effort once set up. Transfers are once a month so I can't see how any delay can upset anything really. Then add £6000 in 2 Tescos at 3%, and £4000 in 2 TSBs at 4.9% and another £2500 in Nationwide at 5%, all the transfers arranged between them. I make that £67500 at just more than 3% and I haven't exhausted all the possibilities yet.

Archergirl

What a shame we would have to go to so much trouble to earn just 3%. I must admit I have no idea what your'e talking about, gives me a headache just trying to sort that out.............

MoneyMate

Had a letter from Nationwide today , last years ISA is going down 0.5% 1st Sept 14.

Thrugelmir

teddysmum wrote: »

Today , came a letter saying the rate is falling to 1.5% from September. That's an interest cut of nearly 15%, so we savers are still being hammered.

If you want instant access to the money that's the price you'll pay. If there was a better rate on offer you'd move your money elsewhere. So little point in playing the loyalty card when you've none either.

jimjames

Archergirl wrote: »

What a shame we would have to go to so much trouble to earn just 3%. I must admit I have no idea what your'e talking about, gives me a headache just trying to sort that out.............

Depends on the amount you have. If you have £1000 you can boost returns to 12.5% by using 2 current accounts together.

Eco_Miser

teddysmum wrote: »

I believe that, next year, people earning less than the £10500 allowance will be able to have an unbelieveable £5000 in interest tax free, so there will be little point in opening ISAs , then.

Well, this year they can have an unbelievable £10000 total non-ISA income, and next year £15500 non-ISA income, plus whatever income they get within their ISAs.

Yes, I can only see a point in S&S ISAs in future, and that mainly to avoid the detailed record keeping and reporting that would otherwise be necessary, though the absence of CGT may be useful one day.

Glen_Clark

Problem is they are all awash with cheap taxpayers funding for lending / help to buy QE funny money. So anybody who offers a savings rate slightly above the rest gets more money than they can lend out. The best I am getting on still available instant access accounts is 1.7% (1.75% in an Isa) with Nationwide, but they have had to restrict even that to people who have held an account for over 15 years.