Where is Everyong Hiding Money?

poseidon1

OP this post and all  your others prior to, suggests your interest in exploring ISAs (both cash and stocks and shares) has been driven by suddenly being taxed on your bank interest and wondering what you can do about it .

However, rather than fire off random disconnected  posts that result in similar disconnected responses,  would it not be best to collect your thoughts, think about your short and medium term objectives and then explore how these can be met from the various services available?

Your post below seems indicative of an unstructured approach to your current predicament-

https://forums.moneysavingexpert.com/discussion/comment/81786567#Comment_81786567

Incidentally I think it was counterproductive in bringing Trading212 to your attention in the above thread as a potential  service provider, since the attraction to you seems to be the offer of free shares when you have yet to get to grips with the basics of investing and indeed of the ISA regime generally.

dunstonh

And I see many / most ISA businesses charge people to use them.

Every bank account has a charge.    Most of the time, it's implicit, and you cannot see it as the deduction is in the interest rate.   It is extremely rare for cash ISAs or other savings to have any explicit charges.

Stocks and shares ISAs have explicit charges but you don't have implicit charges with them (i.e. you get the whole of the return minus an explicit charge).

So is it really the case that I can't have £40,000 sitting in a bank account at 2.5% (for example) doing nothing but waiting for me to spend it when I want to, without the tax man having a chunk or being charged to invest it?

Why is that £40k not in a cash ISA?

Kim_13

You can have £40,000 at 2.5% and pay no tax if you are a basic rate taxpayer - that’s £1,000 exactly. But then there would be the interest on the interest tipping over in the following year if none of the principal had been touched, other things being reported as interest (Nationwide Fairer Share is counted as such) or higher or additional rate taxpayers who have a lower or no PSA. 

If a person had had £40,000 or thereabouts at 2.5% for a few years, then it would have gone over as rates rose. The PSA hasn’t risen with inflation or rates, so it now takes less in order to go over it if not using an ISA. The taxman will treat anyone who goes over the PSA equally - tax is due at whatever their tax rate is. Whether a person has maxed out ISAs or not is not considered - so you might as well use the allowances while they are available. You don’t have to be rich or even expect to pay tax on savings to use them, it is all about shielding money from tax for the future.

ISAs only have a lead time to withdraw if the ISA selected has a notice period - so you wouldn’t choose one. ISAs only have a withdrawal penalty if you choose a fixed rate ISA and want the money back before the end of the term - so I would recommend not fixing at least half of it. An Easy Access ISA will do what you want, and if you choose one that is Flexible, you can pay in £20,000, need to withdraw some or all of it and then pay it back in before the end of the tax year.

£40,000 cash can go into an ISA between now and April 6th, but if you wait until April 6th to start 2 tax years worth of cash allowance will only be £32,000 (unless you are 65 or over.)

S&S ISAs are not free, but it is the investment part that attracts fees, not the ISA wrapper. A General Investment Account, which is the S&S equivalent of a normal savings account, also carries fees. Usually the return is higher after fees than if the money had been left in a savings account.

MeteredOut

Kim_13 said:

S&S ISAs are not free, but it is the investment part that attracts fees, not the ISA wrapper. A General Investment Account, which is the S&S equivalent of a normal savings account, also carries fees. Usually the return is higher after fees than if the money had been left in a savings account.

Both Trading 212 and InvestEngine have fee free S&S ISAs (account fees and transaction fees) and GIAs, but these low-cost providers do come with other constraints, such as a more limited investment choice and next day execution of trades rather than real time. You can also get fee free SIPPs too.

wmb194

MeteredOut said:

Kim_13 said:

S&S ISAs are not free, but it is the investment part that attracts fees, not the ISA wrapper. A General Investment Account, which is the S&S equivalent of a normal savings account, also carries fees. Usually the return is higher after fees than if the money had been left in a savings account.

Both Trading 212 and InvestEngine have fee free S&S ISAs (account fees and transaction fees) and GIAs, but these low-cost providers do come with other constraints, such as a more limited investment choice and next day execution of trades rather than real time. You can also get fee free SIPPs too.

Trading212 isn't next day. In my experience with market orders, if it's a well traded security it's usually almost immediate, less well traded a few minutes. Of some of the other low-cost brokers, IG Invest, Freetrade (owned by IG) and CMC Invest are immediate.

Robin9

OP have you seen Martyn's TV show on investing ?  Now on YouTube.

QrizB

Noting @poseidon1 's post higher up the page, I'm not sure we should be encouraging the OP to run before they can walk.

Start with a nice safe cash ISA from a name you recognise, like the Bank of Ireland. Or Tesco.

https://www.moneysavingexpert.com/savings/best-cash-isa/#topeasy

poseidon1

QrizB said:

Noting @poseidon1 's post higher up the page, I'm not sure we should be encouraging the OP to run before they can walk.

Start with a nice safe cash ISA from a nme you recognise, like the Bank of Ireland. Or Tesco.

https://www.moneysavingexpert.com/savings/best-cash-isa/#topeasy

Was hoping others would see where I am coming from with this OP.

 Cash isa would definitely seem best starting point as well as properly understanding the rules and how these products work. Right now I feel ( in this regard) there is an issue of information overload.

MeteredOut

wmb194 said:

MeteredOut said:

Kim_13 said:

S&S ISAs are not free, but it is the investment part that attracts fees, not the ISA wrapper. A General Investment Account, which is the S&S equivalent of a normal savings account, also carries fees. Usually the return is higher after fees than if the money had been left in a savings account.

Both Trading 212 and InvestEngine have fee free S&S ISAs (account fees and transaction fees) and GIAs, but these low-cost providers do come with other constraints, such as a more limited investment choice and next day execution of trades rather than real time. You can also get fee free SIPPs too.

Trading212 isn't next day. In my experience with market orders, if it's a well traded security it's usually almost immediate, less well traded a few minutes. Of some of the other low-cost brokers, IG Invest, Freetrade (owned by IG) and CMC Invest are immediate.

That reference was to low-cost providers having constraints, and next day execution as an example. InvestEngine bulk up orders to end of day or next day execution (depending on when order is submitted).

wmb194

MeteredOut said:

wmb194 said:

MeteredOut said:

Kim_13 said:

S&S ISAs are not free, but it is the investment part that attracts fees, not the ISA wrapper. A General Investment Account, which is the S&S equivalent of a normal savings account, also carries fees. Usually the return is higher after fees than if the money had been left in a savings account.

Both Trading 212 and InvestEngine have fee free S&S ISAs (account fees and transaction fees) and GIAs, but these low-cost providers do come with other constraints, such as a more limited investment choice and next day execution of trades rather than real time. You can also get fee free SIPPs too.

Trading212 isn't next day. In my experience with market orders, if it's a well traded security it's usually almost immediate, less well traded a few minutes. Of some of the other low-cost brokers, IG Invest, Freetrade (owned by IG) and CMC Invest are immediate.

That reference was to low-cost providers having constraints, and next day execution as an example. InvestEngine bulk up orders to end of day or next day execution (depending on when order is submitted).

Right, but I think it's important to state that that's actually rare.