MSE News: Budget 2015: ISAs to become fully flexible with withdrawals allowed

masonic

EarthBoy wrote: »

Nationwide allows you to do this, but I don't know of any others.

There are several now...

http://www.moneysavingexpert.com/news/banking/2015/03/torn-between-easy-access-and-fixed-cash-isas-more-providers-now-let-you-open-both

iwant2asave

Does this all mean that its likely you can subscribe fully to a cash ISA and then remove the amount necessary for a help to buy ISA later in the year and transferring to a provider that allows splitting if necessary.

Archi_Bald

iwant2asave wrote: »

Does this all mean that its likely you can subscribe fully to a cash ISA and then remove the amount necessary for a help to buy ISA later in the year and transferring to a provider that allows splitting if necessary.

Why chance it when you could save up with much better interest anyway in current accounts?

iwant2asave

Archi_Bald wrote: »

Why chance it when you could save up with much better interest anyway in current accounts?

Yes, I can see many might do that - personally I would prefer not to switch as am happy with my existing current account and I wouldn't want to manage more than one current account with direct debits etc!

jimjames

iwant2asave wrote: »

Yes, I can see many might do that - personally I would prefer not to switch as am happy with my existing current account and I wouldn't want to manage more than one current account with direct debits etc!

No need to switch and no need for DDs on some accounts. Seems crazy to me that anyone would choose 1% tax free over 5% taxed for little effort. I'd assumed anyone who has come to this site wants to maximise their returns - obviously not!

colsten

jimjames, it seems the cash ISA mantra has been completely lost on you. To teach you once and for all, write this 100 times:

I do want a cash ISA even if it pays me four times less interest than other accounts.

If you find this difficult to do, try doing it in a darkened room. As an extra measure, put blindfolds on.

jimjames

colsten wrote: »

jimjames, it seems the cash ISA mantra has been completely lost on you. To teach you once and for all, write this 100 times:

I do want a cash ISA even if it pays me four times less interest than other accounts.

If you find this difficult to do, try doing it in a darkened room. As an extra measure, put blindfolds on.

I'm sorry!

In fact I think as well as repeating it 100 times I also need to get it tattooed on my hands so I can see it whenever I'm tempted to go online and open another current account ....

colsten

Glad to see you are learning

Hope others are too.

iwant2asave

colsten wrote: »

Glad to see you are learning

Hope others are too.

Many thanks gents, sorry if I'm missing something obvious.

I would like to learn where a higher rate taxpayer can get a much better taxed rate than the 2% Yorkshire Bank ISA I'm looking at on £15240...many thanks in advance.

masonic

iwant2asave wrote: »

Many thanks gents, sorry if I'm missing something obvious.

I would like to learn where a higher rate taxpayer can get a much better taxed rate than the 2% Yorkshire Bank ISA I'm looking at on £15240...many thanks in advance.

Congratulations for seeing the light, and commiserations for finding yourself in the higher rate tax bracket. You might benefit from contributing more to a pension in order to reduce your tax liability - have you considered that?

Assuming your higher rate tax liability is unavoidable, this is how you could do better than 2% tax free on £15,240. I am assuming here that you are single and have no possibility of opening joint accounts...

TSB Plus (sole): 5% (3% after HRT) on £2k: £60 interest
Nationwide FlexDirect (sole): 5% (3% after HRT) on £2.5k: £75 interest
Lloyds Club (sole): 4% (2.4% after HRT) on £5k: £120 interest
Lloyds monthly saver: 4% (paid gross in 2016/17 tax year using £500 tax free interest allowance) on £400pcm: £103.38 interest
Total: £358.38 (on £12,100 average balance)
(Total if you paid into a pension to reduce your tax liability to BR: £443.58)

vs YB cash ISA 2% on £15,240: £304.48

Obviously, the non-ISA accounts generate their interest using less than £15,240 (and some of it is dripped in to a regular saver that comes with the Lloyds account), so there is the potential to earn even more than £358.38 on the money not yet saved into the accounts above, especially so if you can open joint accounts and deposit more money at the highest rates. There are also 6% regular savers you could use instead of the 4% one, but I went for what is easiest. You could potentially earn more if you were willing to make use of additional/alternative accounts.