April 6th - Cash ISA or S&S ISA dilemma

PaulW63

With tumbling global share prices going on at the minute, is it a good time or a bad time to be considering investing in a S&S ISA tomorrow? I have £20k which I was going to put into an existing 5.22% cash ISA (Shawbrook), but would appreciate any comments whether it may be an opportunity to buy when share prices are low. If so, any tips?

masonic

Are they low, or are they just less high? Perhaps opt for an easy access cash ISA so that you can hedge your bets and transfer to a S&S ISA if things get really attractive.

Personally, I will be opening a cash ISA this coming tax year, as I have zero cash ISA savings and want to get ahead of any contribution restrictions in the next budget. But I also have plenty of defensive assets in my S&S ISA that can be used to buy the dip (which I have no plans to deploy on Monday).

dunstonh

Prices are lower than they were.  If the drop had not happened and the prices were higher, would you have asked this question?  Would you have invested at that point?

If the answer to the latter is yes, then if you would have invested when unit prices were higher then why would you not invest now that unit prices are lower?

aroominyork

masonic said:

Personally, I will be opening a cash ISA this coming tax year, as I have zero cash ISA savings and want to get ahead of any contribution restrictions in the next budget. But I also have plenty of defensive assets in my S&S ISA that can be used to buy the dip (which I have no plans to deploy on Monday).

Given that you can now buy a money market fund in an S&S ISA, is the expectation that any change to cash ISAs would be accompanied by a change to S&S ISAs that only allowed them to be invested in dividend-paying and no longer in income-paying funds?

masonic

If they wanted to close down an obvious loophole then they would. Bond funds with duration were previously allowed. Just cash and cash-like investments were ineligible.

Qyburn

If they restrict cash ISAs for the reasons given, they might consider the need to make all sorts of changes to S&S ISAs as well. For a start some let you hold cash, and pay interest on it.

If all this is a concern then there's a case for paying into a cash ISA right now, while you still can. It can always be transferred into an S&S ISA at a later date.

TheBanker

There is a lot of uncertainty at the moment - what will happen to the stock markets, what will happen to Cash ISAs and where will interest rates go.

Personally I've put my 2025/6 ISA money into a Cash ISA. I was planning to invest about 50% but I'm going to hold off until things are a bit clearer. I just don't need the extra risk at the moment. The money is safely in an ISA so no tax to pay on the interest, it can be transferred later, and I would be surprised if any ISA rule changes impact existing subscriptions. 

trickydicky14

Why do we get so much ISA questions in this section when we have a dedicated ISA section above?

aroominyork

TheBanker said:

...I would be surprised if any ISA rule changes impact existing subscriptions. 

Am I right in thinking that if the cash ISA is abolished or the amount reduced (£4k is widely mooted), it is very unlikely to take effect before 6 April 2026?

PS  If I start a cash ISA this year, can I subsequently transfer its contents into my existing S&S ISA? (PPS  Just googled it... yes, you can. Leaving this here for others who might want to know, to keep their options open ahead of possible ISA changes. (Apols trickydicky14 for posting here!)

PaulW63

trickydicky14 said:

Why do we get so much ISA questions in this section when we have a dedicated ISA section above?

I suppose it keeps the pedants busy. 

Hope I’ve made your day with my utter carelessness. 
😂

VNX

trickydicky14 said:

Why do we get so much ISA questions in this section when we have a dedicated ISA section above?

God only knows especially when the link to the ISA sub forum is at the top of the page