ISA compound interest

eskbanker

A908705 said:

Well that’s thrown me a curve ball, having been recommended by MSE I feel like I have been conned.

If you're referring to the UBL products, MSE references to them (not 'recommendations' as such) have usually highlighted that the interest is paid away rather than compounded.

A908705 said:

It was not obvious or even logical that the interest is not added to the ISA account, that defeats the objective of having the ISA in the first place.

No, it doesn't, although if you wanted to build the balance up within the ISA shelter then it's not suitable for that.  It would suit those wanting regular tax-free income though....

A908705 said:

Does the interest received monthly outside the ISA then become taxable?

Not the interest itself, but any interest subsequently earned on that money (outside the ISA) would be subject to tax.

A908705 said:

It may well be in the detailed blurb but this isn’t what I thought I was signing up for.

Read the detailed blurb before signing up to financial products!  However, an earlier post stated that the application process highlights the practice of paying interest away, so it shouldn't have been necessary to get too far into the detail.