Isa to pay off part of mortgage

isasmurf

with some £30billion invested with them.

I think you'll find the amount invested in Cash ISAs is closer to £80bn than £30bn.

http://www.inlandrevenue.gov.uk/stats/isa/table9_6_september04.pdf

I agree with DD, Cash ISAs should be used for short term savings.

Robert_Sterling_3

 My financial adviser sugested a flexable  mini cash isa savings plan with Legal and General.

Mini Cash ISAs are only guaranteed to continue for 10 years from when they first started.
What rate does the Mini Cash Isa from L&G pay?
Why do I wonder if it is in fact an Equity ISA?

dunstonh

Mini Cash ISAs are only guaranteed to continue for 10 years from when they first started.
What rate does the Mini Cash Isa from L&G pay?
Why do I wonder if it is in fact an Equity ISA?

Perhaps as pav clarified it a few posts later saying it was indeed an equity ISA. ;D

deemy2004

Yeh

the beauty of ISAs is that they can be used for both short and long-term savings.

But the fact that the interest is gross and does not count as taxable earnings makes them a good long-term savings product for tax payers, as there is a dis-incentive to disinvest, becuase of the cap of 3k of deposits in any one tax year, regardless of subsquent withdrawls.

When they are gone, snif, snif, we will miss them (well most of us), and regret not having used the full wack when we had the chance.

In an 'fair' world, the government should not be taxing interest on savings, since we've already had it taxed when we earned it ! But as things stand the cash-isa's are the next best thing.

So yove got this year and next to at least stuff in £6k for the next decade or so

deemy2004

I think you'll find the amount invested in Cash ISAs is closer to £80bn than £30bn.

.

Hi

the £30bill is the amount invested with Building Societies, excluding elsewhere.

deemy2004

Cash ISAs are perfect for emergency fund and short term savings.  

Okay give me some long-term savings products that beat cash isa's

dunstonh

Okay give me some long-term savings products that beat cash isa's

equity ISAs, investment bonds, unit trusts, oeics, pensions etc all offer greater potential over the longer term.

You cannot compare those to cash ISAs though. Because the cash isa is designed to be short term, it has no element of risk and has a small contribution limit.

It is ideal for those with limited disposable income to save, totally risk adverse or those building up an emergency fund and not using their MAXI allowance.

My Equity ISAs are averaging over 10% a year and the investments are suitable for my risk profile. I would be stupid to use a Cash ISA.

Your answer to everything seems to be cash isa. However, you cannot give a blanket answer that suits everyone. If the Cash ISA allowance was standalone and didnt affect Equity ISA (ala PEP and TESSA days), then that would be a different matter.

pav_2

Hi, getting back to my flexible mini stocks and shares isa, DD said I have basically been sold an endowment.  I told the adviser at the time that I did not want anything to do with endowments as the rest of my mortgage is covered be very poor performing one from Friends P, and he said it was nothing like an endowment.
Question: I have paid in about £2600 to date and my fund is worth £2000, can I draw it out and close it without loosing any more?

dunstonh

Hi, getting back to my flexible mini stocks and shares isa, DD said I have basically been sold an endowment.  I told the adviser at the time that I did not want anything to do with endowments as the rest of my mortgage is covered be very poor performing one from Friends P, and he said it was nothing like an endowment.
Question: I have paid in about £2600 to date and my fund is worth £2000, can I draw it out and close it without losing any more?

You may have grounds for complaint.

An endowment is a savings vehicle and life assurance combined. You have a savings vehicle and life assurance held separatly but packaged together. Different tax and charging structure but same principle.

The ISA has a daily value. What you could do is stop the ISA with L&G and set up your own ISA with no initial charge through a discount broker and save yourself 5% inital charge (or whatever it is) on each contribution. The fund selection would probably be more suitable as you can pick a range of funds rather than just one.

Another option is to stop the ISA but leave the funds in there until the balance grows to a level you are happy with. In the meantime, you could switch the mortgage to repayment basis.

Just because you cease contributions to the ISA, doesnt mean you have to cash it in. (you can also transfer it away from L&G).

pav_2

Thanks for the advice DD, I would like to pay some of the mortgage off to get the interest payments down, and I have all the life cover I need. There seems little point in paying more in interest on the motgage than I am receiving on my savings. the isa is a disapointment, I expected a little profit after four and a half years, not a £600 loss.