The 85k guarantee-enough to protect ISA accumulation?

masonic

soros wrote: »

If anyone has got some money in an ISA and says it is bad to hold 85k in an ISA it is hypocritical.

What about £300 dripped into a HSBC Loyalty Cash ISA earning £10 per month?

I don't currently have any money in a cash ISA, but will soon be doing the above.

patientperson

The following guide might be of interest. It identifies where financial instituitions are owned by others. This does concern the £85,000 limit.

https://downloads.saversfriend.co.uk/guides/SF_guide_who_owns_whom.pdf

masonic

MARTYM8` wrote: »

In that scenario the FSCS system would go bust - so the government would step in presumably to protect all deposits (or use a bail in).

They could just step in to protect all deposits up to £85k. Why take the gamble?

colsten

soros wrote: »

I`m not a big fan of ISA`s generally.

If 85k in an ISA can be considered a poor way to invest, then so can putting just 2k in an ISA. It`s all about the rate of ruturn on the amount invested.

Keep 85k in an ISA today and the return is insulting. Keep 2k in an ISA and return is still insulating. Both are rubbish investments at the moment

If anyone has got some money in an ISA and says it is bad to hold 85k in an ISA it is hypocritical.

A point being over-looked here is this: What if 85k is held in an ISA and that 85k is only 2% of a person`s total wealth?:j

Perhaps you should distinguish between cash and S&S ISAs, and also read this article: http://monevator.com/get-an-isa-life/

jimjames

soros wrote: »

I`m not a big fan of ISA`s generally.

If 85k in an ISA can be considered a poor way to invest, then so can putting just 2k in an ISA. It`s all about the rate of ruturn on the amount invested.

Keep 85k in an ISA today and the return is insulting. Keep 2k in an ISA and return is still insulating. Both are rubbish investments at the moment

If anyone has got some money in an ISA and says it is bad to hold 85k in an ISA it is hypocritical.

A point being over-looked here is this: What if 85k is held in an ISA and that 85k is only 2% of a person`s total wealth?:j

I'm a great fan of ISAs, just not cash ones. S&S ISAs are worth it for long term money. Continually taking out 5 year fixed rate cash ISAs just seems pointless, if you're prepared to lock it up for multiple periods of 5 years then cash isn't the best place to be.

How many people have £85k as 2% of their wealth? Tiny numbers and far smaller than the number who have £85k at all.

£2k in an ISA is far worse than £85k as you can get a better return of 5% on that, with £85k you have far less options.

Eco_Miser

soros wrote: »

I`m not a big fan of ISA`s generally.

If 85k in an ISA can be considered a poor way to invest, then so can putting just 2k in an ISA. It`s all about the rate of ruturn on the amount invested.

Keep 85k in an ISA today and the return is insulting. Keep 2k in an ISA and return is still insulating. Both are rubbish investments at the moment

If anyone has got some money in an ISA and says it is bad to hold 85k in an ISA it is hypocritical.

It depends. I have some £12k in a cash ISA, earning 5%. That doesn't mean I'd recommend anyone to have £85k in a cash ISA, or £2k at currently available rates.

More generally, it is sensible to permanently have maybe £10-20k in cash, it is not sensible to hold £85k in cash long term, whether in or out of an ISA, assuming that £85k is not just a small part of the holder's total fortune.

PeacefulWaters

The £85k FSCS limit is a deposit limit.

Cash ISAs are simply a wrapper used for some deposits. Just because you can pay more in to an ISA these days doesn't mean that the FSCS limit should be increased. After all, that money can sit in a normal taxable savings account anyway.

FSCS protection has a price. We all pay for that protection via lower interest rates. If you are demanding more protection the inevitable outcome is even lower rates.

When over 98% of savers have 100% of their deposits protected I don't really see the need for change. It would simply mean a subsidy from savers with small balances to protect savers with big balances.

We've already gone from £35k to £50k to £85k in a short amount of time.

If you want to revalue cover, it needs to match EU requirements of €100,000. That's about £70,000 at today's exchange rates.

I'd focus more on investments in pensions and stocks and shares ISA. And stop worrying about the FSCS.

Thrugelmir

MARTYM8` wrote: »

In that scenario the FSCS system would go bust - so the government would step in presumably to protect all deposits (or use a bail in).

The Icelandic bailout monies are still being repaid with higher levy's imposed on Financial Institutions by the FSA. Ultimately the consumer foots the bill.

racing_blue

I don't think it is necessarily wrong to have a lot of money in cash ISAs.

I might want a portfolio of about 50% equities, 50% bonds. But these are strange times and I might be wary of bond funds. Because bond funds have become much more expensive recently and what goes up, comes down.

So instead I might go 50% equities, 50% cash- for now. Cash ISAs offer me this option in a tax-avantaged way.

HMRC100

mike88 wrote: »

Anyone who keeps in excess of £85k in a cash ISA needs financial advice.

You do write some rubbish!
I have a cash ISA in excess of £100k earning 2.5% and I'm quite content. Interest rates will go up. Get in the real world!!

I'm a millionaire and a qualified accountant.
Why do I need financial advice??