ISAs - I give up!

vigman

Having just moved all ISAs to the Post Office 1.1% easy access account, I get a notification today that it is falling to 0.86%.
I just can't risk going the S&S ISA or investment route, but this chasing tiny percentages is getting ridiculous.
Just in case I've missed a trick, is there any current ISA people are going to please?
TIA
Vigman

inspectorperez

The only hope for Cash ISA savers is for the government to take pity on their plight and allow NS&I to market a cash ISA easy access product at a guaranteed rate of say 1%. I think currently the rate is 0.9%.

A 5 year fix of 2.5% would even sound attractive.

dunstonh

I just can't risk going the S&S ISA or investment route,

On a sliding scale of 1-10, cash is risk 1 but S&S ISA investments largely start around risk 3.   You dont need to jump to risk 10.

Is there a reason why you dont want investment risk but are happy taking on shortfall risk and inflation risk (there can be many valid reasons)?

snowqueen555

dunstonh said:

I just can't risk going the S&S ISA or investment route,

On a sliding scale of 1-10, cash is risk 1 but S&S ISA investments largely start around risk 3.   You dont need to jump to risk 10.

Is there a reason why you dont want investment risk but are happy taking on shortfall risk and inflation risk (there can be many valid reasons)?

I am all cash now. I can't stomach the movements, there is a psychological element that people overlook.

dunstonh

snowqueen555 said:

dunstonh said:

I just can't risk going the S&S ISA or investment route,

On a sliding scale of 1-10, cash is risk 1 but S&S ISA investments largely start around risk 3.   You dont need to jump to risk 10.

Is there a reason why you dont want investment risk but are happy taking on shortfall risk and inflation risk (there can be many valid reasons)?

I am all cash now. I can't stomach the movements, there is a psychological element that people overlook.

 Research has found the average consumer is generally cautious but not many are at the level that cannot accept any volatility.   Very often it is the lack of knowledge and understanding that is the blocker to decision making.  The assumption that you either need to be in risk 1 or risk 10.    So, its always worth checking on threads like this as often the people posting dont understand all the risks.

vigman

dunstonh said:

I just can't risk going the S&S ISA or investment route,

On a sliding scale of 1-10, cash is risk 1 but S&S ISA investments largely start around risk 3.   You dont need to jump to risk 10.

Is there a reason why you dont want investment risk but are happy taking on shortfall risk and inflation risk (there can be many valid reasons)?

Sorry for the delay...and the reason for my non-risk strategy!
I have serious health issues, life threatening, in fact. I just don't want to gamble with my wife's future capital. Our main income is my work pension and state pension. She will get half my work pension (which isn't much anyway) and her state pension which has just started.
The savings I've built up in ISAs could be used to withdraw, say, £5000 towards her income for at least 10 years.
If I put £50K + into an S&S ISA and it drops half, then I would be really concerned.
I do realise this is the prefect time to buy the RIGHT shares (in managed accounts) and there will be huge profits for some, but I can't gamble with my wife's future.
Vigman

dunstonh

If I put £50K + into an S&S ISA and it drops half, then I would be really concerned.

What makes you think it would drop by half?  Even if you went 100% equities, there has been no event in living memory that has seen a 50% drop.   However, as I said, risk is a sliding scale.  Your example of investments is at risk 10 on a 1-10 scale and cash at risk 1 (which is still risky as you are leaving your wife with shortfall risk and inflation risk which could be far more damaging).  You are ignoring the options between 1 and 10.

eskbanker

dunstonh said:

If I put £50K + into an S&S ISA and it drops half, then I would be really concerned.

What makes you think it would drop by half?  Even if you went 100% equities, there has been no event in living memory that has seen a 50% drop.

It depends what the equities are!  There are many examples of individual equities losing 50%, or even 100%, although you're presumably referring to collective investments or markets rather than someone piling everything into, say, Lloyds shares - you obviously know this but I just thought I'd clarify for anyone who might not....

vigman

dunstonh said:

If I put £50K + into an S&S ISA and it drops half, then I would be really concerned.

What makes you think it would drop by half?  Even if you went 100% equities, there has been no event in living memory that has seen a 50% drop.   However, as I said, risk is a sliding scale.  Your example of investments is at risk 10 on a 1-10 scale and cash at risk 1 (which is still risky as you are leaving your wife with shortfall risk and inflation risk which could be far more damaging).  You are ignoring the options between 1 and 10.

Actually there has also been no drop of 20% in GDP in living memory....and that's before the Brexit effect kicks in next year!!
I think I just can't risk losing *anything* even on a sliding 1-10 scale in the circumstances I describe (and I do realise inflation is eating away at capital). I'm sure people investing on the low/medium scales will do well over a large spread of managed S&S in the next few years but it won't be me.
Having said that, I have been given plenty of dire warnings about my lifespan in the past and have somehow managed to sidestep the problem. You may have to put up with years of me still posting here!
Vigman

masonic

vigman said:

dunstonh said:

If I put £50K + into an S&S ISA and it drops half, then I would be really concerned.

What makes you think it would drop by half?  Even if you went 100% equities, there has been no event in living memory that has seen a 50% drop.   However, as I said, risk is a sliding scale.  Your example of investments is at risk 10 on a 1-10 scale and cash at risk 1 (which is still risky as you are leaving your wife with shortfall risk and inflation risk which could be far more damaging).  You are ignoring the options between 1 and 10.

Actually there has also been no drop of 20% in GDP in living memory....and that's before the Brexit effect kicks in next year!!
I think I just can't risk losing *anything* even on a sliding 1-10 scale in the circumstances I describe (and I do realise inflation is eating away at capital). I'm sure people investing on the low/medium scales will do well over a large spread of managed S&S in the next few years but it won't be me.
Having said that, I have been given plenty of dire warnings about my lifespan in the past and have somehow managed to sidestep the problem. You may have to put up with years of me still posting here!
Vigman

If you are aware of inflation, have you considered the relative likelihood of cash being rendered worthless vs investments being rendered worthless?

There have been several events in living memory that have resulted in people's cash savings falling in value by 99+%. This has happened as recently as 2008 in Zimbabwe, 1994 in Yugoslavia, and after the second world war in Hungary and Greece.

Putting all your eggs in one basket, such as cash, is riskier than you seem to appreciate.

vigman

If you are aware of inflation, have you considered the relative likelihood of cash being rendered worthless vs investments being rendered worthless?

There have been several events in living memory that have resulted in people's cash savings falling in value by 99+%. This has happened as recently as 2008 in Zimbabwe, 1994 in Yugoslavia, and after the second world war in Hungary and Greece.

Putting all your eggs in one basket, such as cash, is riskier than you seem to appreciate.

No, to be honest, I hadn't considered a 'wheelbarrow cash society' in the UK. Are there any projections of the likelihood of this, please?
I just wish I'd bought more gold when I was advising others to do the same!
Vigman