The 85k guarantee-enough to protect ISA accumulation?

joe134

jimjames wrote: »

You might not want the hassle but 20% more of 1% doesn't match the 3-5% you can get outside an ISA.

The thread is a bit irrelevant though, it's not the value in an ISA that's important but the total cash with any one institution.

I did say, don't put all your eggs in one basket.I have all the 3 >5 >6 % a/cs going, as well as my Isas, also, long term fixed rate bonds, etc.I used to have distribution bonds, etc also, but. after 10 years I sold, and made. They now have a bad reputation, as does other such products.It all depends on what you are investing for.? Capital growth is fine, but, Not, short term, Or,if you need your monies at short notice.I don't use advisors, after a bad experience in 87 crash, nowhere to be found.However, I stupidly panicked and sold.Don't take a risk with what you cannot afford to lose, and shares are risky, however you look at them, in the short term, and sometimes. forever, if you are guided wrongly. There's no such thing as a cert.There's going to be a lot of losers in the new pension advice given, and PP's etc.it's plain to see, as long as you know the risks, then buyer beware.;Do your OWN homework, FA's aren't cheap, and there's no guarantee with what they advise you to do.

masonic

soros wrote: »

but I don`t grasp where the high rate (82%) comes from. I`m not challenging you, just trying to gain an understanding of what you are sharing. This site could be good, but I feel the bickering (further up the thread) can often spoil a good session of information sharing.

No it's not the regular saver, it's the ISA you linked above with the save together offer. Together, those give you 1.6% AER + a £120 bonus (total £122.59 if you deposit £25 per month). Take that to the MSE regular savings calculator and you can reverse engineer the fact that £122.59 paid on a regular savings deposit of £25 per month equates to 82% AER (rounding down).

jamesd

HMRC100 wrote: »

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??

Because you have more than a hundred thousand Pounds in a cash ISA. This implies quite extreme caution levels or lack of knowledge of the alternatives. Or maybe letting the tax wrapper rather than the investments rule.

Without excessive risk levels you could get 30% of your investment back in income tax, capped at no more than the income tax paid in the tax year, then 5% or so non-guaranteed tax free income and no CGT on VCT investments. The 30% has to be repaid if sold within five years except after death.

If you want to keep the ISA wrapper for some reason it's not particularly hard to beat cash ISA rates in investments, though there is some capital volatility. Later it'll be possible to use the more stable P2P investing to get between 4% and 12% on the money. The P2P option is already available within a few pensions.

Given the options available to you I wonder whether you have yet arranged your affairs to eliminate almost all of your income tax bill. You appear to have the assets available to do it. If you're still paying income tax or think that the returns from cash ISAs make sense for the sort of sum yo have invested it appears that you could benefit from the knowledge of a specialist in personal finance, the IFA.

racing_blue wrote: »

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

Agreed. Your example of deliberately taking money out of the equity markets and not in bonds is one of the good uses for it.

mike88 wrote: »

Your earlier posts about Gloucester Old Spot Pork, Morrisons Disney Cards, Cheap Strawberries and PG Tips for £1.60 are not the kind of subjects I would expect to be of interest to a millionaire

That sort of thing is entirely consistent with typical millionaire behaviour. You might find the book The Millionaire Next Door of interest. In general millionaires are quite frugal. Among other things the book illustrates how many people could choose to change their habits to become millionaires if they stopped spending like a stereotypical millionaire.

jamesd

soros wrote: »

Question: Does the gov need to get up to speed with legislation for ISAS in respect of the protection limit?:money:

Yes, to reduce it to the £50,000 investment limit, but this is not possible within EU rules that require around the £85,000 limit for deposits.

The current cash limit encourages inefficient use of money at relatively high cost to the budget, due to the immediate loss of tax on the income generated. Increasing the limit would increase the size of money movements to whatever place offered the best rate, and out of it if the rate dropped, decreasing the stability of the financial system.

Having to think about the limit is a good sign that someone is using their money inefficiently and needs to do a double-take.

In the investment world, including pensions, where larger amounts fo money are involved, the limit is just £50,000 per provider. Having the money in trust and diversifying between investments and investment providers delivers reasonable protection in these areas.

jimjames

joe134 wrote: »

I did say, don't put all your eggs in one basket.I have all the 3 >5 >6 % a/cs going, as well as my Isas, .

That's good to hear.

One thing I was going to suggest based on the comment by soros below was that it would make sense to maximise the high interest current accounts for likely future spending. There doesn't seem much point keeping money in a cash ISA that is being spent in the next couple of years when you can get better rates on it.

So for anyone else, accounts like:

TSB @5%
Nationwide @ 5%
Lloyds @ 4%
Tesco @ 3%
Santander @ 3%
Halifax - £5 per month

would all make sense for money that is being spent in the short term OR if you have less than say £30k in savings.

You can also maximise your returns with a few switches as well when they are paying out £100-£150 to move an account.

soros wrote: »

(Come on guys, let`s keep it civil. It`s a them & us out there, regardless of what Mr. Cameron says. Let`s help each other on here, and pool our info).

And the best bit with these accounts is that they're taxable so you get a better return and you help the taxman get some extra tax to help the deficit too!

jamesd

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

It's been possible to have more than £100k in a cash ISA after interest, you were probably thinking of just the total of money paid in. Since last April it's also been possible to move S&S ISA money to a cash ISA so the practical limit today is a few million pounds in a cash ISA, that being around the maximum anyone has so far achieved with S&S ISA investing. While HMRC100 has received disagreement on some aspects of their posts, their original point that more than £100,000 in a cash ISA is possible is correct.

joe134

jamesd wrote: »

It's been possible to have more than £100k in a cash ISA after interest, you were probably thinking of just the total of money paid in. Since last April it's also been possible to move S&S ISA money to a cash ISA so the practical limit today is a few million pounds in a cash ISA, that being around the maximum anyone has so far achieved with S&S ISA investing. While HMRC100 has received disagreement on some aspects of their posts, their original point that more than £100,000 in a cash ISA is possible is correct.

I am proof you can, I have had Tessas and Isas. since they were brought out, and have way in excess of £100k, and Wife too. Had PEP's to, till they were stopped.IF Isa rates rise, or, when should be more to the point, then that should be the time that I/we reap the benefit of the tax shelter, on cash, which at 70 +,is to me more suitable.no good investing, for investing sake,one must have a goal, if not , spend it, or pay Iht..