Reeves' ISA review

ivormonee

MeteredOut said:

There are money market ETFs (eg, CSH2) but *if* there are restrictions, I'd fully expect cash equivalent funds/ETFs to have the same restrictions.

That's a good point. I hadn't really thought of that. I think though that I read somewhere that "the chancellor" was/ is considering a stipulation of something like money put in an S&S ISA should be at least 25% invested in UK equities, or something like that. So, not only might she limit cash ISA thresholds, she might also see fit to tell us where to invest our money, further taking away choices that should rightfully be ours. Most commentators on this forum would make much better chancellors.

CSH2 seems a go-to choice but I did notice that they changed their benchmark index earlier this year, from SONIA UK to a European index, but using a GBP hedging mechanism to aim at overall replicating the SONIA index anyway. I'm not sure how comfortable I am with the extra convolution, and the higher TER that it carries (0.10% compared to 0.05% previously). But will stay on the radar.

wmb194

ivormonee said:

MeteredOut said:

There are money market ETFs (eg, CSH2) but *if* there are restrictions, I'd fully expect cash equivalent funds/ETFs to have the same restrictions.

That's a good point. I hadn't really thought of that. I think though that I read somewhere that "the chancellor" was/ is considering a stipulation of something like money put in an S&S ISA should be at least 25% invested in UK equities, or something like that. So, not only might she limit cash ISA thresholds, she might also see fit to tell us where to invest our money, further taking away choices that should rightfully be ours. Most commentators on this forum would make much better chancellors.

CSH2 seems a go-to choice but I did notice that they changed their benchmark index earlier this year, from SONIA UK to a European index, but using a GBP hedging mechanism to aim at overall replicating the SONIA index anyway. I'm not sure how comfortable I am with the extra convolution, and the higher TER that it carries (0.10% compared to 0.05% previously). But will stay on the radar.

If you want ultra safe in Freetrade's Isa you can buy one month (actually 28 days) UK Treasury bills. IIRC AJ Bell offers the three and six month variants. There's no secondary market so you're locked in for the duration, though.

There's a weekly auction every Friday except Christmas week/week after. With Freetrade you have until 21.00 on Thursday to put your order in.

Yesterday I bought a few one month ones and the annualised return is 3.99%. Usually it's pretty close to Bank Rate.

 https://www.ajbell.co.uk/learn/treasury-bills

 https://freetrade.io/uk-treasury

Albermarle

ivormonee said:

MeteredOut said:

There are money market ETFs (eg, CSH2) but *if* there are restrictions, I'd fully expect cash equivalent funds/ETFs to have the same restrictions.

That's a good point. I hadn't really thought of that. I think though that I read somewhere that "the chancellor" was/ is considering a stipulation of something like money put in an S&S ISA should be at least 25% invested in UK equities, or something like that. So, not only might she limit cash ISA thresholds, she might also see fit to tell us where to invest our money, further taking away choices that should rightfully be ours. Most commentators on this forum would make much better chancellors.

CSH2 seems a go-to choice but I did notice that they changed their benchmark index earlier this year, from SONIA UK to a European index, but using a GBP hedging mechanism to aim at overall replicating the SONIA index anyway. I'm not sure how comfortable I am with the extra convolution, and the higher TER that it carries (0.10% compared to 0.05% previously). But will stay on the radar.

'I think that I read somewhere' ' or something like that' is not really a very good basis for criticism of the Chancellor.
Probably better to wait for some actual announcements, rather than just commentating on speculation, most of which comes from anti Govt sources anyway.

Darnhall123

Alpine_Star said:

boingy said:

You've got to be a bit scared of a Chancellor who thinks that Cash ISAs and S&S ISAs serve the same purpose for most people.

Quite.

Stocks & shares ISAs (Individual Savings Accounts) shouldn't actually be called ISAs at all.

100% agree. “Savings account” implies that the amount saved is safe and not open to the risk of going down (or at worst, lost). 

ivormonee

I suppose they could have called it an IIA (individual investment account), rather than an S&S ISA, to enable better clarity for the distinction.

Darnhall123

ivormonee said:

I suppose they could have called it an IIA (individual investment account), rather than an S&S ISA, to enable better clarity for the distinction.

Absolutely. More sense spoken on here than behind the doors of government or major financial institutions. 

wmb194

Darnhall123 said:

ivormonee said:

I suppose they could have called it an IIA (individual investment account), rather than an S&S ISA, to enable better clarity for the distinction.

Absolutely. More sense spoken on here than behind the doors of government or major financial institutions. 

It’s better to have a unified name so you have an idea that they’re related to one another, they share the annual deposit allowances and you can transfer money between them.

Prior to ISAs there were Tessas (savings accounts) and PEPs (investments) and they were more confusing. I think it was better that they merged them under a unified brand.

What’s to say you can’t, “save” in an investment account anyway? Technically an investment is anything with a positive expected outcome so this actually includes savings accounts. It’s just useful to distinguish between no risk - ‘savings’ - and at risk - ‘investments’ when taking about these things. 

Darnhall123

wmb194 said:

Darnhall123 said:

ivormonee said:

I suppose they could have called it an IIA (individual investment account), rather than an S&S ISA, to enable better clarity for the distinction.

Absolutely. More sense spoken on here than behind the doors of government or major financial institutions. 

It’s better to have a unified name so you have an idea that they’re related to one another, they share the annual deposit allowances and you can transfer money between them.

Prior to ISAs there were Tessas (savings accounts) and PEPs (investments) and they were more confusing. I think it was better that they merged them under a unified brand.

What’s to say you can’t, “save” in an investment account anyway? Technically an investment is anything with a positive expected outcome so this actually includes savings accounts. It’s just useful to distinguish between no risk - ‘savings’ - and at risk - ‘investments’ when taking about these things. 

Wow “Tessas”. Now there’s a memory jerker! 😅

Kim_13

ivormonee said:

I suppose they could have called it an IIA (individual investment account), rather than an S&S ISA, to enable better clarity for the distinction.

I agree, even when the Mini and Maxi naming was in place, the savings part was still (wrongly) there.

intalex

Couldn't just call it TFA (tax free account) with a Cash or S&S prefix?