Removing Cash from ISA

60camraman60

Many years ago "endowment policies" were the way to save and fund mortgages. At the time these worked for me to the extent that they did indeed generate enough to pay off the mortgage and leave me excess funds that I have invested into cash ISA's. Now these policies have nearly all been paid out and I have a decent sum in ISA's but I no longer generate enough funding to fill up my ISA allowance every year. The question is how do people feel about the idea of taking say £15k out of the ISA and putting it into a Santander 123 account or similar and getting the max interest at 3%. The reason for £15K is that I can quickly put it back into an ISA if need be. I do not generate enough "cashback" to cover the £5 a month fee as we have oil and solar panels so our household bills are low in the eyes of Santander. Another alternative is to "max out" say out a LLoyds account with a lower amount but a higher interest.

xylophone

You can have sole and joint Flex direct accounts, Lloyds Club accounts, TSB accounts, Tesco accounts.....

grumbler

60camraman60 wrote: »

...The question is how do people feel about the idea of taking say £15k out of the ISA and putting it into a Santander 123 account or similar and getting the max interest at 3%.

I feel fine.
IMO, our government successfully killed cash ISAs buy increasing the allowance to the amount unachievable for the majority of people. Now tax is the only difference between ISAs and other savings accounts, and only for people who make more than £1K p.a. from interest. And banks have absolutely no incentives to pay a decent rate on ISAs.

bigadaj

If you are a couple then you can get in excess of £100000 into current accounts with some effort, paying around 4% on average, this is probably three times the rate of interest you are getting in the cash isa. On top of this regular savers could take many thousands per year at generally a slightly higher rate.

It's up to you how you manage your finances, as grumbler says I would feel fine whatever your decision.

General convention is also that any monies above say a few months expenditure would be best held in stocks and shares, ideally isas, accounts, as this will in all probability produce a higher level of return but everyone is different.

YorkshireBoy

Lots of "I"s in your OP, and just one "we" at the end. So are there two of you? And are you currently financially associated or prepared to be?

How much is in the ISA (or ISAs if there are two of you)? Appreciate it's personal info, but the amount available will enable specific tailored suggestions to be given. For example, and with a little bit of work, as a couple you could get £70,500 making a clean (ie no fees involved) 3-5% AER over the next year. And there's more to be had by drip-feeding 5-6% regular savers from the 3% paying accounts, thereby getting an aggregate 4-4.5% on the original 3% cash.

And if it all goes pear-shaped, you'd be able to get almost all of it back into ISAs...£15K per person each side of the new tax year. Worst case scenario is £30K back in straight away (after 6/4/16) and the rest the following year.

Eco_Miser

bigadaj wrote: »

General convention is also that any monies above say a few months expenditure would be best held in stocks and shares, ideally isas, accounts, as this will in all probability produce a higher level of return but everyone is different.

That's any monies not intended to be spent within the next 5-10 years. General consensus is that investments should be for at least five years.

bigadaj

Eco_Miser wrote: »

That's any monies not intended to be spent within the next 5-10 years. General consensus is that investments should be for at least five years.

Yes, but possibly not quite as long term as an endowment......

60camraman60

YorkshireBoy wrote: »

Lots of "I"s in your OP, and just one "we" at the end. So are there two of you? And are you currently financially associated or prepared to be?

Yes we are financially associated. I make it, she spends it.

Seriously though. Thanks for all your comments. I do have a S&S ISA that pays better than the cash ISA but I am a bit unsure when it comes to risk hence the cash ISA's that I, used to, know at least for 12 months how much I was going to accrue. My main concern is the tax free element of ISA's. I am of the age of 14% interest and although I can never see us getting back to that level am happier future proofing my savings in ISA's hence the £15k max withdrawal so if as "Yorkshire Boy" says I can easily get it back into an ISA. Obviously I would like to keep all my money. I give to the government in too many other ways as it is.

badger09

60camraman60 wrote: »

YorkshireBoy wrote: »

Lots of "I"s in your OP, and just one "we" at the end. So are there two of you? And are you currently financially associated or prepared to be?

Yes we are financially associated. I make it, she spends it.

Seriously though. Thanks for all your comments. I do have a S&S ISA that pays better than the cash ISA but I am a bit unsure when it comes to risk hence the cash ISA's that I, used to, know at least for 12 months how much I was going to accrue. My main concern is the tax free element of ISA's. I am of the age of 14% interest and although I can never see us getting back to that level am happier future proofing my savings in ISA's hence the £15k max withdrawal so if as "Yorkshire Boy" says I can easily get it back into an ISA. Obviously I would like to keep all my money. I give to the government in too many other ways as it is.

As there are 2 of you, you can instantly return a little over £30k into cash ISAs should you wish:cool:

Would you rather earn up to 6% on your cash, and pay some tax - or earn 1.5% (very approx:o) tax free?

Your decision

YorkshireBoy

badger09 wrote: »

As there are 2 of you, you can instantly return a little over £30k into cash ISAs should you wish:cool:

...and of course if you decide to do this around this time next year (eg if high interest current account rates plummet), the figure is £60K (£15K each, either side of the tax year end).

YorkshireBoy

60camraman60 wrote: »

I am of the age of 14% interest...

Me too, but when rates were that high I only had debt (in the form of a mortgage), and virtually no savings!