R85 has ended but what next?

Kim_13

I am simply writing down the amount, date and payer of each interest payment. I probably won't need it as I won't exceed the allowance, but at least I have all the information with minimal hassle if any questions are asked.

pinkdalek

msallen wrote: »

That will probably cost you more than any income tax might.

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Missy79

pinkdalek wrote: »

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Interest rates on ISAs are so low that it will likely be better to use higher interest paying accounts and pay the tax than use an ISA.

pinkdalek

Missy79 wrote: »

Interest rates on ISAs are so low that it will likely be better to use higher interest paying accounts and pay the tax than use an ISA.

True if you have around £20k only to play around with, however if you are a higher rate tax payer, or have substantial savings and prefer cash based investments only then ISAs are a sensible place to save to avoid tax.
Plus it will always be tax free moving forward.
It can also be inherited to the spouse on death in an APS allowance.

Investing in money is not a "in the here and now" moment. There is nothing at all wrong with putting £20k or so in a higher paying current account I am not disputing that at all, but ISAs should be seen as a longer term way of making your money work for you.

Granted Joe Public is likely to have smaller money to play around with and ISAs may not appeal, but not everyone is the same. What is right for one is not always right for everyone.

Kim_13

Edit: Beaten to it.

bigadaj

pinkdalek wrote: »

True if you have around £20k only to play around with, however if you are a higher rate tax payer, or have substantial savings and prefer cash based investments only then ISAs are a sensible place to save to avoid tax.
Plus it will always be tax free moving forward.
It can also be inherited to the spouse on death in an APS allowance.

Investing in money is not a "in the here and now" moment. There is nothing at all wrong with putting £20k or so in a higher paying current account I am not disputing that at all, but ISAs should be seen as a longer term way of making your money work for you.

Granted Joe Public is likely to have smaller money to play around with and ISAs may not appeal, but not everyone is the same. What is right for one is not always right for everyone.

As an individual you can out around £50k or more into high interest svaings accounts, well over £100k if you are a couple. On top of this there are many more thousands to be put into regular savings accounts.

Cash isas are dead for anyone sensible, the only potential exception is for those who don't want to lose an isa allowance with a large sum at the end of the tax year.

Once you have anywhere near the figures mentioned above then additional money should be going into other asset classes, for most this will be collective share funds or property, but bonds, p2p, commercial property or even commodities, gold etc may be a possibility.

The very worst thing you can do is fail to diversify, and this goes for cash as much as any other asset class, with inflation and shortfall risk associated with it.

Between the £40k allowed into pensions and the £15-20k in isas now allowed annually then even losing an isa allowance for a year isn't a great problem for the vast majority of the population.

EssexExile

Interesting times, the wife & I have lots of money in ISAs, we won't take it out because when things get back to normal they are a good place to have money.

Will things get back to normal in our lifetimes? It's been a while.

bigadaj

EssexExile wrote: »

Interesting times, the wife & I have lots of money in ISAs, we won't take it out because when things get back to normal they are a good place to have money.

Will things get back to normal in our lifetimes? It's been a while.

Well you can see some indication from forward bond and interest rate swaps.

Nothing is changing soon, I have been transferring money from cash isas into stocks and shares versions as the interest rates drop for the last few years, and maintaining cash in current accounts instead.