should i open an ISA?

JeffMason

Hi All,

I have bank accounts with (or used to have) decent interest rates, and am thinking of moving lots to my Marcus savings account instead. I've mostly looked over ISA's as the interest rate has always been better other places, especially with the easy access that I want. And I'm too old for a LISA.

I'm now wondering if I should open an ISA. I have around 50k spread over bank and savings accounts, 20k of that in a Santander account that won't be any good in a few months. I was thinking the best option was to move it to my Marcus account, but can anyone advise if I should be looking at an easy access ISA instead / as well?

The tax free aspect is perhaps helpful, but I don't think I'm making enough to be taxed anyway...

Thoughts?

eskbanker

JeffMason wrote: »

I've mostly looked over ISA's as the interest rate has always been better other places, especially with the easy access that I want.

[...]

I was thinking the best option was to move it to my Marcus account, but can anyone advise if I should be looking at an easy access ISA instead / as well?

The tax free aspect is perhaps helpful, but I don't think I'm making enough to be taxed anyway...

Cash ISAs are generally fairly uncompetitive versus taxable accounts, but the balance shifts a bit if/when savers exceed their personal savings allowance of £1,000 annual interest (basic rate taxpayers) or £500 (higher rate), so the best approach would typically be to choose accounts on the basis of net return, allowing for any tax payable....

JeffMason

eskbanker wrote: »

Cash ISAs are generally fairly uncompetitive versus taxable accounts, but the balance shifts a bit if/when savers exceed their personal savings allowance of £1,000 annual interest (basic rate taxpayers) or £500 (higher rate), so the best approach would typically be to choose accounts on the basis of net return, allowing for any tax payable....

That's what I was thinking. But was wondering if I was missing something. Thanks for the confirmation.

george4064

It looks like you haven't considered investing the money at all, which means you are actually exposing your savings to a lot of risk due to inflation erosion. i.e. prices are rising faster than the return you are getting with your savings, so you can actually buy LESS things with that money sat in the bank.

If you can afford to lock the money away ideally for 10 years at least you should invest the money in a stocks & shares ISA in a globally diversified fund, since you already have a lot of the money in an ISA you can transfer it to a Stocks & Shares ISA.

JeffMason

george4064 wrote: »

It looks like you haven't considered investing the money at all, which means you are actually exposing your savings to a lot of risk due to inflation erosion. i.e. prices are rising faster than the return you are getting with your savings, so you can actually buy LESS things with that money sat in the bank.

If you can afford to lock the money away ideally for 10 years at least you should invest the money in a stocks & shares ISA in a globally diversified fund, since you already have a lot of the money in an ISA you can transfer it to a Stocks & Shares ISA.

I don't have any money in an ISA currently, and I don't really want to lock any of it away at the moment. Are there better options than savings accounts like the Marcus one I have?

george4064

JeffMason wrote: »

I don't have any money in an ISA currently, and I don't really want to lock any of it away at the moment. Are there better options than savings accounts like the Marcus one I have?

Go look at the various savings options here and decide for yourself: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

I can't really help you because you haven't put any details about your circumstances, your goals etc...

JeffMason

george4064 wrote: »

Go look at the various savings options here and decide for yourself: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

I can't really help you because you haven't put any details about your circumstances, your goals etc...

I've looked and Marcus is what works best for me right now. I was wondering if an ISA would be a good idea as it's tax free, but perhaps there is no need.

Thanks again.

colsten

JeffMason wrote: »

I don't have any money in an ISA currently, and I don't really want to lock any of it away at the moment. Are there better options than savings accounts like the Marcus one I have?

You can eke out a bit more if you use Regular Savers

The first few posts in this thread get updated regularly with the best (non-ISA) Regular Savers and the best feeder accounts. https://forums.moneysavingexpert.com/showthread.php?t=5776240. There are, in theory, ISA Regular Savers, too but I think they have dried up a little recently. May be there will be new ones in March/April.

If you are unfamiliar with the benefits of drip-feeding Regular Savers, you can use this calculator to work out whether it's worth your while.