Are ISAs really that good?

Baffled12

Hi Everyone


Sorry for jumping into the middle of this thread but I cannot seem to find an answer to this question.


I opened a 2 year fixed ISA, all the money was entered on opening and then no more could be added.


In year 2 can I open a new ISA and pay money in or will I be breaking the rules?


Do I have to wait for the 2 year ISA to mature and then open a new one?


Really appreciate any helpful comments on this query.

Zorillo

Yes, you can do that as soon as the tax year has changed after you opened the first one. It changes in April each year, so as long as you opened the 2 year ISA prior to then, you can open a new ISA now.

Keep_pedalling

For most people cash ISA have been pointless for many years. The last one we had paid 6%, but since then that has been shifted into S&S ISAs, and non ISA savings have been fed into those ISAs every year since. Apart from tax free dividends those now contains a very large chunk of capital gains that we will never have to pat tax on.

jimjames

C_Mababejive wrote: »

They key is tax. Who wants to pay tax? Not me. I do all i can to keep my tax bill small.

Imagine a situation where you retire. The current personal allowance is about £12,500,,cant recall without looking it up.

If you had a load of money invested in ISAs over the years you could take 12500 from your pension pot (if you have one !) and then top up with money from your ISA. Result ? No tax to pay.

If you have an ISA all income is tax free. If you've built up a decent pot of S&S ISA investments, say £500k you could currently be taking £20k per year completely tax free and with no impact on any other income/tax allowances so potentially well over £30k of tax free income every year.

capital0ne

jimjames wrote: »

If you have an ISA all income is tax free. If you've built up a decent pot of S&S ISA investments, say £500k you could currently be taking £20k per year completely tax free and with no impact on any other income/tax allowances so potentially well over £30k of tax free income every year.

Totally agree, people laughed at me 10+ years ago when my cash ISA earned £80, saving me about £15 in tax, now I could be taking an income of £15k plus tax free, but I don't need it so it's all being re-invested. They'r not laughing now, just say how lucky I am - not so I say, the longer you buy and hold the luckier I get - hehehehehe!

Bit like gary Player saying the more he practised golf the luckier he got!

Cardinal rule for shares - hold forever - who said that? :T

chucknorris

AviatorEGHH wrote: »

Hi everyone,
At the moment I am fortunate enough to have some money saved and sitting in Cash ISAs. I haven't used fixed term ISAs because I am constantly hoping I will find a better way of investing and will want to move or access the money somehow.
I can't help but feel I am losing money...am I wrong???

Interest rates are bad as we know but more importantly, even if they improve, they will never be higher than the rate of inflation. Therefore, my saved money is losing value every year.

So, why is MSE so pro ISA???
Should I be looking at Stocks and Shares ISAs? Using my savings as a deposit on a buy-to-let property?
I have no debts or loans but I have a mortgage running at about 1.3% and always manage max overpayments to reduce the term.

Someone out there must have a good suggestion for me. I'm lost...HELP!

Thanks!!

ISA's are fantastic (although I wouldn't touch a cash ISA with a barge pole, at current rates). I currently earn over 4% tax free from my stocks and shares ISA, as well as significant capital growth, free of CGT.

AviatorEGHH

ISA's are fantastic (although I wouldn't touch a cash ISA with a barge pole, at current rates). I currently earn over 4% tax free from my stocks and shares ISA, as well as significant capital growth, free of CGT.

Sounds like the kind of thing I'm looking for. Would you mind revealing what the stocks and shares are that are being invested in, in that ISA?