Why do you leave it till now to use your 14/15 isa allowance?

bigfreddiel

I can never understand why people leave it till the last minute to use their isa allowance, thus wasting an entire years worth of growth and income!

I can think of a few reasons, ignorance, laziness, head in the sand, distrust of financiers.

I think it's the same problem with pensions, something people only think about when they approach 50ish, and then it's getting too late!

On the other hand I guess it's a good thing that the sp age is increasing so 50ish year olds will now have a few more years to work and save into their pension and isa.

Cheers fj

Archi_Bald

If you are talking S&S ISAs, I might just about agree with your conclusion. Although not everybody wakes up on the first day of a new tax year with the ready cash to max the ISA allowance. This is particularly true now that the allowance is £15K.

If you are talking cash ISAs, I profoundly disagree with you. It would have been incredibly smart not to use the 2014/15 ISA allowance in a cash ISA as yet. As the money would have earned a lot more in interest paying current accounts, and in regular savings accounts. A cash ISA would indeed have been wasting a good part of an entire years worth of growth and income.

If you want to stay in cash, it might even be incredibly smart not to use that 2014/15 allowance at all.

Pensions might be a slightly different issue, but I am sticking with the title of your thread.

jimjames

You might not have the cash to put in £15k, I don't. But I setup the S&S ISA to pay in monthly over the whole year.

N1AK

bigfreddiel wrote: »

I can think of a few reasons, ignorance, laziness, head in the sand, distrust of financiers.

Are they your guesses at why people don't use ISA allowances earlier in the year, or an explanation of why you haven't been able to answer an obvious question yet?

My wife is a standard rate tax payer. We can get considerably better returns outside of an ISA than have been available within an ISA for cash savings. We have been using my allowance for S&S and it was used up considerably earlier this year.

Frankly unless you are sitting on £80k+ cash outside of an ISA then moving it into an ISA earlier in the financial year is probably an example of ignorance.

N1AK

jimjames wrote: »

You might not have the cash to put in £15k, I don't. But I setup the S&S ISA to pay in monthly over the whole year.

Even if you did have the cash then you're probably doing the right thing spreading your S&S investment over the year helps decrease the risk of buying heavily at a market peak. You'd also have to have very considerable S&S holdings outside of ISAs not to be able to avoid CGT, or be a higher rate taxpayer who is buying based on dividend yield, for it to matter.

jimjames

N1AK wrote: »

Even if you did have the cash then you're probably doing the right thing spreading your S&S investment over the year helps decrease the risk of buying heavily at a market peak. You'd also have to have very considerable S&S holdings outside of ISAs not to be able to avoid CGT, or be a higher rate taxpayer who is buying based on dividend yield, for it to matter.

That only works if things drop during the year. If markets rise then you'd be better off putting it all in as early as possible!

If you are putting money in current accounts then it may be best to leave the money there rather than using cash ISAs at all.

Vortigern

bigfreddiel wrote: »

I can never understand why people leave it till the last minute to use their isa allowance.

A certain Money Saving Expert called Martin has been encouraging his followers to do that for most of this year! Words to the effect of "save in a high interest current account, then put it in an ISA in March."

Otherwise perhaps there are some optimists out there who think there will be some special offers in the so-called ISA season.

Historically when allowances were smaller, and when I was on a tighter budget, I wouldn't have committed cash to an ISA if there was a chance I might have to withdraw it before the year end.

colsten

bigfreddiel wrote: »

I can never understand why people leave it till the last minute to use their isa allowance, thus wasting an entire years worth of growth and income!

I don't understand why "growth and income" should only be possible in an ISA - can you explain your line of thinking?

bigfreddiel wrote: »

I can think of a few reasons, ignorance, laziness, head in the sand, distrust of financiers.

hmh. A bit far-fetched perhaps, don't you think so?

dancingfairy

I suspect many are just disorganised, only hear about at at ISA season, panic they haven't put anything away, put away what they can and then don't have any to put in at the beginning of the next tax year, think they will do it sometime later.... get to the end of the tax year, panic... etc etc
Obviously there are some that have savings elsewhere, or are holding them elsewhere before locking into an ISA but I assume that that isn't the majority.
df

CCFC_80

Won't be investing mine until the last minute. Would much prefer to have my 15K in a Santander 123 account earning 3% interest.
No ISA is currently paying any where near that.

jimjames

CCFC_80 wrote: »

Won't be investing mine until the last minute. Would much prefer to have my 15K in a Santander 123 account earning 3% interest.
No ISA is currently paying any where near that.

Why not just leave it in the 123 account to keep getting 3%?