The 85k guarantee-enough to protect ISA accumulation?

HMRC100

Archi_Bald wrote: »

If anybody maxed their TESSAs and cash ISA allowances throughout the years, they could easily already have more than £85K (but less than £100K) in cash ISAs. Those that maxed their PEP and S&S ISA allowances are all likely to have considerably more. High 6-figure amounts are not uncommon, and there have been ISA millionaires since 2003.

Keeping huge sums in cash ISAs is almost certainly not the optimal long term strategy as equities have historically consistently outperformed cash.

I doubt we will be seeing any increase of the £85K FSCS limit any time soon.

It is worth remembering that basically the only reason we have an £85K limit for cash was a European Union directive (94/19/E, 2010), which brought the UK in line with the rest of the EU. If the UK left the EU, my guess would be that the limit would be even more unlikely to rise in the next 10-20 years than it is anyway.

I have a cash ISA in excess of £100k

HMRC100

jimjames wrote: »

Absolutely.

I'd also question how many this affects, very few I'd imagine.

See my earlier post.
Somebody else who sounds financially clueless!!

HMRC100

racing_blue wrote: »

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.

One of the more sensible people on this forum.

colsten

HMRC100 wrote: »

See my earlier post.
Somebody else who sounds financially clueless!!

Welcome to this thead. May be you should read what people wrote before you accuse them of being clueless.

jimjames said he questions "how many this affects, very few I'd imagine". Where is the financial cluelessness in what he said? You have provided basically no information that would answer jimjames' question. Just because you are "a millionaire and a qualified accountant" with a £100K+ cash ISA doesn't mean that there are many, or even any apart from you, who have more than £85K in a single cash ISA.

HMRC100 wrote: »

You do write some rubbish!

people in the glasshouse shouldn't throw stones

masonic

HMRC100 wrote: »

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!!

Are you sure? Here's a peek into a very plausible future: http://www.marketwatch.com/story/why-british-interest-rates-will-never-go-up-again-2014-10-29

I'm a millionaire and a qualified accountant.

Obviously the super-wealthy don't need to concern themselves with risk-based investments at all, since they already have all the money they'll ever need. Most of the responses assume people want to make their money work for them.

PeacefulWaters

I've seen so many self employed clients who trust their accountants implicitly.

Yet have never had a conversation about the tax advantages of pensions with them.

ermine

Archi_Bald wrote: »

Keeping huge sums in cash ISAs is almost certainly not the optimal long term strategy as equities have historically consistently outperformed cash

and the tragedy then being that the limit for S&S ISAs is lower at £50k

wrote:

The maximum level of compensation for claims against firms declared in default on or after 1 January 2010 is £50,000 per person per firm.

jimjames

ermine wrote: »

and the tragedy then being that the limit for S&S ISAs is lower at £50k

Do you understand what that limit is?

masonic

ermine wrote: »

and the tragedy then being that the limit for S&S ISAs is lower at £50k

It's not quite so much a tragedy as it first appears due to the ring-fencing of nominee accounts. For them to lose client money would probably involve fraud and since the nominee accounts tend to be collective, the loss would be spread between all affected investors, each of which could claim up to £50k.

jimjames

HMRC100 wrote: »

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

Obviously the average demographic for MSE then.

Wonder why so many others seem to be on zero hour contracts and only have a few thousand in the bank if anything.

Does seem rather bizarre though for someone supposedly qualified keeping non risk assets in a tax shelter that is more appropriate for ones that will increase capital as well as income but as long as you know what you're doing for your own situation.