Is a shepherdsfriendly.co.uk ISA worth the cashback?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
5 replies 1.2K views
boomishboomish Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I've got to sort our savings, I've got 16k in an Santander ISA & so has my wife with another 5k in 2xBank accounts that pay interest and use STO to keep them paying into each other.

But I noticed on Topcashback there is £315 cash back if I open a shepherdsfriendly.co.uk Stocks & shares ISA. This seems very good, if I bump up my ISA to 20k and use lump sum to open an account & if we can find a bit extra maybe my wife too.

Appreciate any thoughts..

PS I just opened a Marcus savings account as per MSE recommendation and was going to give up the ISA & put it all in there.

Replies

  • edited 30 June 2019 at 6:47PM
    jaybeetoojaybeetoo Forumite
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    edited 30 June 2019 at 6:47PM
    Do not invest in a Stock & Shares ISA based on how much cash back you get!

    How soon will you need access to the money in the ISA?

    What is your attitude to risk?

    Have you read the Key Information Document and the Important Information Guide? Have you seen what the charges are? You can get a S&S ISA with the same level of risk a lot cheaper (but no cash back).

    Where do you think the £315 cash back is coming from?
  • boomishboomish Forumite
    125 Posts
    Part of the Furniture 10 Posts Combo Breaker
    jaybeetoo wrote: »
    Do not invest in a Stock & Shares ISA based on how much cash back you get!

    How soon will you need access to the money in the ISA?

    What is your attitude to risk?

    Have you read the Key Information Document and the Important Information Guide? Have you seen what the charges are? You can get a S&S ISA with the same level of risk a lot cheaper (but no cash back).

    Where do you think the £315 cash back is coming from?

    Appreciate the advice but I kinda feel like saying "I only asked" reading your reply..
  • Reed_RichardsReed_Richards Forumite
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    You get the most from cashback, in percentage terms, if you invest the minimum amount. If it really is "cash back" then presumably your contributions need to exceed £315 to get it but you could set-up a direct debit and cancel it as soon as that has happened (£55 a month for 6 months would do the trick). I don't know if this would work; read the small print.
    Reed
  • lgdtlgdt Forumite
    2 Posts
    Hi Boomish. My first time posting here but I've got over 30 years experience in investing so hopefully can help.

    I became aware of this Snepherds Friendly Topcashback deal last year when a mate asked me to have a look at it for him. Hopefully I saved him a lot of hassle and money and will be able to do the same for you.

    The investment on offer here is a fixed term "With Profits" endowment policy inside an ISA wrapper. These tend to have a number of features - mostly bad! They levy extremely high charges and commissions which have a very negative impact on your investment growth. They tend to offer - in return for a degree of safety - very low growth prospects. And they have extremely penal terms if you want to get at your money before the end of the term. The reason there is such a big cashback sum - I suspect - is that they can afford to rebate you a decent sum at the outset in anticipation of all the lovely commission and charges they will be taking from you in the future.

    These investments were very widely sold in the 1980s and 1990s but became rightly discredited for the reasons I've stated. If you want to start with something low risk and cheap I'd say you're far better to go with something like an ETF tracker.

    But primarily my advice on this investment is AVOID!
  • AlexlandAlexland Forumite
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    Accordingly to their website FAQ they charge an initial 3% followed by an ongoing 1.5% annual management fee. So if you invested £20k you would be paying an initial £600 to get £315 cashback and then you are lumbered with a high fee product with sluggish growth prospects and potential early withdrawal penalties.
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