ISA cashback offers

mugston

From what I can see there is no thread dedicated to these (please correct me if I am wrong).

It would be extremely beneficial to the community if we had one, especially where there are "flaws" in the term and conditions that would allow us multiple ISA transfers and promotions each tax year.

It is my first year as a UK resident and have yet to choose an ISA provider, if somebody more experienced wants to share current cashback offers they know of.

mebu60

Presume you are talking about S&S ISAs? Google search will list sites that detail current offers. 

eskbanker

Are you referring to S&S ISAs in particular?  There's a long-running thread about best cash ISAs, but these are generally fairly easy to compare on a like-for-like basis, whereas the charging models of S&S ISAs are more complex, especially the ongoing costs, which will be dependent on trading frequency, choice of investments, etc, and cashback promotions may mask higher annual costs, so it's significantly harder to identify 'best buys'.

mugston

This could be worth keeping an eye on, although it only shows one at the moment:

https://www.moneysavingexpert.com/savings/robo-funds/

eskbanker said:

Are you referring to S&S ISAs in particular?  There's a long-running thread about best cash ISAs, but these are generally fairly easy to compare on a like-for-like basis, whereas the charging models of S&S ISAs are more complex, especially the ongoing costs, which will be dependent on trading frequency, choice of investments, etc, and cashback promotions may mask higher annual costs, so it's significantly harder to identify 'best buys'.

I was planning on using my full ISA allowance for S+S, but if a cashback offer on a cash ISA is good enough I will consider it.

Is this the thread you mentioned?;

https://forums.moneysavingexpert.com/discussion/401374/cash-isas-the-best-currently-available-list#latest

eskbanker

mugston said:

eskbanker said:

Are you referring to S&S ISAs in particular?  There's a long-running thread about best cash ISAs, but these are generally fairly easy to compare on a like-for-like basis, whereas the charging models of S&S ISAs are more complex, especially the ongoing costs, which will be dependent on trading frequency, choice of investments, etc, and cashback promotions may mask higher annual costs, so it's significantly harder to identify 'best buys'.

I was planning on using my full ISA allowance for S+S, but if a cashback offer on a cash ISA is good enough I will consider it.

Personally I'd caution against that approach - cashback schemes such as current account switching incentives are often recommended on here on the basis that they're easy to obtain with very little skin in the game, i.e. you can pick up a couple of hundred quid without committing any of your money or having to switch your main account.

However, cashback deals on ISAs will entail committing balances and potentially signing up to sub-optimal deals, in terms of poor investment choice and/or higher costs, over a period of a year or more, so they're unlikely to be as beneficial to the customer when considered in the round.

It would also be unusual to be swayed between S&S and cash ISAs on the basis of a cashback offer - saving and investing are two fundamentally different activities, and it would be unusual for them to be interchangeable in that way, given that it would generally be one or the other that fits the individual's financial circumstances and objectives.

mugston said:

Is this the thread you mentioned?;

https://forums.moneysavingexpert.com/discussion/401374/cash-isas-the-best-currently-available-list#latest

Yes.

mugston

eskbanker said:

It would also be unusual to be swayed between S&S and cash ISAs on the basis of a cashback offer - saving and investing are two fundamentally different activities, and it would be unusual for them to be interchangeable in that way, given that it would generally be one or the other that fits the individual's financial circumstances and objectives.

I plan to put all of my ISA into S+S.

However, if, say, putting £100 of it into a cash ISA gives a £50 cashback and generates a return of 150% - it would be foolish to invest this £100 portion into the stock market instead expecting a higher return.

Of course this is just a made up example, but I believe if these offers are efficiently managed they will improve the overall return of the ISA portfolio.

eskbanker

mugston said:

eskbanker said:

It would also be unusual to be swayed between S&S and cash ISAs on the basis of a cashback offer - saving and investing are two fundamentally different activities, and it would be unusual for them to be interchangeable in that way, given that it would generally be one or the other that fits the individual's financial circumstances and objectives.

I plan to put all of my ISA into S+S.

However, if, say, putting £100 of it into a cash ISA gives a £50 cashback and generates a return of 150% - it would be foolish to invest this £100 portion into the stock market instead expecting a higher return.

Of course this is just a made up example, but I believe if these offers are efficiently managed they will improve the overall return of the ISA portfolio.

Well, yes, very much so - hypothesising about unrealistic scenarios doesn't seem particularly productive, but do come back and update the thread if anything like that ever happens!  The return in your theoretical example is 50% btw....

If you Google "cash isa cashback" it doesn't turn up any cash ISA offers but does show some links to pages summarising current S&S ISA offers, which perhaps fulfils the original point about where such information can be found:

https://moneytothemasses.com/saving-for-your-future/investing/isa-cashback-offers-and-fee-free-deals
https://moneyweek.com/personal-finance/605718/isa-bonus-cashback-offers
https://www.thisismoney.co.uk/money/isainvesting/article-13248653/Isa-transfer-cashback-deals-Isa-2-000-boost-new-tax-year.html