Martin Lewis and Cash Isa

Contador38

Incredible
Martin Lewis is reported as saying one should ditch cash ISA and it is useful to only a few.

I did not see the prog on ITV , but MSN News are reporting his views that one must have at least £35,000 to be near getting £ 1,000 in interest.
While this is true, he reckons most people have less than £10,000 in saving
As for having £35.000, he says  Fewer than 20 people get close to that.

I wonder if this has been badly reported
Martin issues urgent warning over ISA savings accounts and says many should 'ditch' them (msn.com)

Dazed_and_C0nfused

The relevance of £1,000 is a massive over-simplification.

Each person needs to look at their own personal circumstances.

Some people can easily have £18,570 in taxable interest without having to pay a penny in tax.

RG2015

Contador38 said:

Incredible
Martin Lewis is reported as saying one should ditch cash ISA and it is useful to only a few.

I did not see the prog on ITV , but MSN News are reporting his views that one must have at least £35,000 to be near getting £ 1,000 in interest.
While this is true, he reckons most people have less than £10,000 in saving
As for having £35.000, he says  Fewer than 20 people get close to that.

I wonder if this has been badly reported
Martin issues urgent warning over ISA savings accounts and says many should 'ditch' them (msn.com)

This is perhaps fewer than 20% of people get close to that. That would be about 6.8 million in the UK based on an adult population of 34 million.

Whatever happened to proof reading?

silvercar

Dazed_and_C0nfused said:

The relevance of £1,000 is a massive over-simplification.

Each person needs to look at their own personal circumstances.

Some people can easily have £18,570 in taxable interest without having to pay a penny in tax.

And very much higher earners may have no interest allowance at all!

the problem with taking money out of an ISA is that takes years to get it back in, if your circumstances change so protecting interest from tax would be more in your favour.

jimjames

Contador38 said:

Incredible
Martin Lewis is reported as saying one should ditch cash ISA and it is useful to only a few.

As someone who has for years said cash ISAs are pointless for most people, I now have completely changed my tune. The increase in rates certainly makes them worthwhile for many people and when rates inside an ISA are equivalent to those outside they are of use to most, if not all, people. So essentially if Martin is saying to ditch cash ISAs as default then I would disagree despite advocating that in the past.

mark_cycling00

Personally I feel this recent ML "advice" is unhelpful and borders on unauthorized financial advice.

Only a year since he told us not to fix our energy prices! And a few months since advising everyone that 5% savings fix was pointless and you should just do a 1yr fix 

1. Every year you don't do a cash ISA you've lost £20k of tax free investment for life. 
2. It's easy for the government to reduce the £20k limit in the future
3. It's easy for the government to cancel the £1000 tax free savings limit in the future
4. Your £1000 "tax free" savings takes up £1000 of your 20% tax rate pushing you closer to the 40% rare

5. Inflation is pushing millions into the 40% tax rate over next few years and these will lose most of their £1000 "tax free" allowance

Interest rates will go lower, with an ISA you can then swap into 5-8% dividend stocks abs reits. Tax free

RG2015

mark_cycling00 said:

Personally I feel this recent ML "advice" is unhelpful and borders on unauthorized financial advice.

Only a year since he told us not to fix our energy prices! And a few months since advising everyone that 5% savings fix was pointless and you should just do a 1yr fix 

1. Every year you don't do a cash ISA you've lost £20k of tax free investment for life. 
2. It's easy for the government to reduce the £20k limit in the future
3. It's easy for the government to cancel the £1000 tax free savings limit in the future
4. Your £1000 "tax free" savings takes up £1000 of your 20% tax rate pushing you closer to the 40% rare

5. Inflation is pushing millions into the 40% tax rate over next few years and these will lose most of their £1000 "tax free" allowance

Interest rates will go lower, with an ISA you can then swap into 5-8% dividend stocks abs reits. Tax free

Martin Lewis is aiming his advice at the masses and they are likely to be less well informed that folk on these forums. The poor young man on the ML ITV show thought an ISA would be a good option despite not being taxpayer.

I would suggest that most people with savings above £35,000 or higher rate taxpayers are most financially astute. Therefore they would do their own research rather that rely upon "The Man"

As regards your specific points, I would comment as follows.

1. Most people do not have savings of £20k let alone £20k every year.
2. and 3. I agree that we cannot rely upon these but I believe that the cost of such actions would negate the financial benefit to the National coffers.
4. Yes this is a worry.
5. Yes, but they would only lose half (£500) not most of their "tax free allowance"

Your final point is somewhat moot as we are talking about cash ISAs not S&S ISAa. 

eskbanker

Contador38 said:

Martin Lewis is reported as saying one should ditch cash ISA and it is useful to only a few.

I don't see why this is suddenly being regarded as news, other than the fact that it was mentioned again on TV recently.

Once the personal savings allowance was announced in 2015 (actually in force from 2016), MSE and ML have been putting out pieces querying whether there's any future for cash ISAs (for most), so this has been going on for eight years!

https://web.archive.org/web/20150416020233/http://www.moneysavingexpert.com/savings/is-the-cash-ISA-dead (2015)

https://blog.moneysavingexpert.com/2016/02/is-it-time-to-ditch-cash-isas-now-that-all-savings-will-be-tax-free/ (2016)

However, as @jimjames points out, recent rises in interest rates are making cash ISAs more appealing than before, so if anything this downplaying of cash ISAs is less relevant now than it has been for years, but, as ever, it's prudent to read details rather than soundbites and headlines....

RG2015

"As for having £35.000, he says  Fewer than 20 people get close to that."

I wonder who they are. 

jimjames

RG2015 said:

"As for having £35.000, he says  Fewer than 20 people get close to that."

I wonder who they are. 

I guess Nadhim Zahawi is one Only 19 more to find... 

RG2015

jimjames said:

RG2015 said:

"As for having £35.000, he says  Fewer than 20 people get close to that."

I wonder who they are. 

I guess Nadhim Zahawi is one Only 19 more to find... 

Well it won't be Alexander Boris de Pfeffel Johnson.