Are cash ISA's worth the hassle ?

natman

'I'm getting to thinking that cash ISA's are really a load of hassle, and not worth bothering with'.

Do you know something even though anything to keep the tax man off my savings would be a good thing, there is a little part of me that agrees with the original post.......................
I have had a cash ISA for 3 years and they are the account that i always seem to change each year, maybe twice a year trying to chase the good rate.
Some accounts pay similar to ISA rates - Take my ISA.
Was with ING Direct last year - 6.5%, end of the year comes, down to 4.54% !!!!!!. even my instant access account at Yorkshire building soceity pays more than this!!!!!!!! I apply to a new provider - ICESAVE - 6.10% However the companies between them lose my money. They blame it on a lot of transfers happening etc etc, but i wouldnt be transferring in the first place if the rate stayed decent. All my money is back with ING Direct at 4.54% but I am attempting to transfer again, so thats another couple of months without interest!!!! It all seems quite long winded and no one ever tells you whats going on, coz they dont know due to the ammount of transfers happening all over the UK, How bizzare!!!!

As I mentioned before
there are accounts which pay decent rates without being an ISA -
ICICI, ICESAVE, Kaupthing edge. I just cant understand why there is so much money being transfered when a simpler system would be better.........

Bernie

earlgrey wrote: »

People are reporting the transfer to Lloyds taking up to eight weeks, in which case they'll get the 6.5% rate for just 10 months.

I'm pleased to be able to state that the wife's ISA took only one week to transfer from Ruffler (after Ruffler's 30 Day notice period elapsed to avoid loss of interest). We knew that this would be the case and we would get the higher rate for only 11 months.

By the time this one comes to the end of it's fixed rate, we'll already have determined it's next home.

Shortly after taking out this fixed rate ISA, Lloyd's dropped their rate ISA significantly. We note that there are now some other providers offering similar rates but they were not around at that time... you have to go for the best deal around and when we looked - this was it. If we can jack up the rate by 0.35% on every move, we'll be happy!!

As I pointed out, Ruffler has raised it's rates up again to 6.25% so my ISA has been moved to them a couple of months after moving out the wife's.

...and of course the Lloyd's ISA rate is fixed - the others could still go down and that would make the move look really good.

We'll see this time next year eh?

jonesMUFCforever

There is also another great advantage in putting your cash savings in an ISA.
If you apply or get tax credits the interest does not have to be specified as extra income on the form ie if you have interest of more than £300 in a normal savings account your tax credits allowance will be reduced - put it in an ISA - not only will you get more interest in most cases but you won't be penalised if you have a bit of cash put by.

For anyone wanting to read more - its on page 31 of this year's renewal Tax credit packs.

I,M_SAD

I always get twitchy when I am transferring isa,s between providers,I don,t think I will end any economic crisis with my savings but....:rolleyes:

I am not the brightest with maths or interest rates,or tax on savings,I have a block with figures,it,s embarrassing actually,I really can,t work out figures,so when I see like today BM,S show the interest rate after 20% tax,as well as before,then yes I think Isa,s are worth the effort,as even my poorest paying isa with krbs is more than their best account after tax.I am as literal as that,I am afraid.I did,nt use to though as I always just used them as a savings account and withdrew the money after April 05.I agree transfers could be less laborious and time waiting,but I am happy to keep an eye on my interest rates now,but I am a little older now and want to keep my isa,s for the future,I am finally understanding that isa,s have"compounded interest"god I hope that,s right,as in I leave interest earned with the Isa and I hope to keep money in Isa,s for the long term,as opposed to me being a "wally" and withdrawing it all the time.I never spent the isa,s I just put it into an account that had the higher interest rate,but without the tax exemption.I appreciate it must be weird for some posters to realise some people like me are just not clued up on figures,etc or genuinely understanding things with APR,s etc,I say that because I still don,t.:DI am aware though that I will never earn huge amounts of money,but I am very risk adverse,so I need the a fairly safe way to bank,it may sound boring or a bit dull and as much as I marvel at the way some posters have made very good judgements with shares,etc and buy into oil,wheat,gold etc,and have made a very good profits,I am not knowledgable enough and never will be or brave enough to do that.I think if you have a good lifestyle and living within your means then Isa,s are probably dull,but to someone like me,they are scary enough but they have a lot of reassurances in truth.Isa,s won,t change your life in any spectacular way,but I like saving now,I am just happy to do the best I can with money and with my personality.

earlgrey_3

natman wrote: »

It all seems quite long winded and no one ever tells you whats going on, coz they dont know due to the ammount of transfers happening all over the UK, How bizzare!!!!

Unlike with a stocks and shares ISA, all tax payers pay a bit less tax by using a cash ISA. That's easy.

The wider question is whether the system itself with all the bureaucracy involved makes fiscal sense or whether it would be simpler to just give everyone a straightforward basic tax allowance on their savings interest and forget the fancy names and special accounts.

That way, the less astute would get the same benefit automatically without all the complications or worry. As it is, there's a lot of ordinary folk out there paying a bit more tax than they should.

Bernie wrote: »

...and of course the Lloyd's ISA rate is fixed - the others could still go down and that would make the move look really good.

Or the other rates could go up of course. You'll know whether you've gained or lost by moving when you find out how long it takes to get out of the variable rate account it becomes after 12 months.

Bernie

earlgrey wrote: »

Or the other rates could go up of course. You'll know whether you've gained or lost by moving when you find out how long it takes to get out of the variable rate account it becomes after 12 months.

...totally agree! Pays yer money, takes your chances - just our little bit of "speculation".

Getting my ISA transferred out of IF was dragged out by them so you may be right about Lloyds... Ruffler were pretty good and their move was completed within a week of the notice period elapsing.

StevieJ

baby_boomer wrote: »

Halifax's 4 Year fixed rate @ 6.2% would solve your problem if you didn't need the cash over that time scale.

Spot on BB, no hassle there providing you get a good rate.

Sapphire

macca64 wrote: »

IMHO yes they are definately worth it, I personally don't want to pay any more tax than necessary, and transferring to a better rate doesn't take that long (a few minutes to fill in a form), and there is no loss of interest with some providers.

Transferring doesn't take that long? Who are you kidding? See the separate thread on people's progress with transferral to a Nationwide ISA. Not only do they take months, but they also can mess up transferrals, which makes me very nervous indeed when it comes to my personal finances. And the lack of communication is truly deafening. :mad:

NATIONWIDE: PROUD TO BE DIFFERENT. Yes, incompetent, disrespectful b******s. :mad:

macca64

Only just seen Sapphires responce!! My point was the form filling doesn't take long. I know how slow Nationwide are, I transferred from Kent Reliance to Nationwide's 1 year fix at 6.15%, took them months to complete, however I never lost any interest, as they backdate the interest.

Baldur

Sapphire wrote: »

Transferring doesn't take that long? Who are you kidding? See the separate thread on people's progress with transferral to a Nationwide ISA. Not only do they take months, but they also can mess up transferrals, which makes me very nervous indeed when it comes to my personal finances. And the lack of communication is truly deafening. :mad:

NATIONWIDE: PROUD TO BE DIFFERENT. Yes, incompetent, disrespectful b******s. :mad:

The problem is certainly not restricted to Nationwide, they sound positively speedy compared to Lloyds TSB - who have yet to successfully transfer a Cash ISA from my original application in early March 2008. But, hey, it's only been eight months.