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  • FIRST POST
    • MSE Luke
    • By MSE Luke 31st Aug 17, 3:51 PM
    • 277Posts
    • 78Thanks
    MSE Luke
    MSE News: Savers abandon cash ISAs in wake of new tax rules
    • #1
    • 31st Aug 17, 3:51 PM
    MSE News: Savers abandon cash ISAs in wake of new tax rules 31st Aug 17 at 3:51 PM
    The amount of new money saved in cash ISAs has dropped by a third in the past year...
    Read the full story:
    'Savers abandon cash ISAs in wake of new tax rules'

    Click reply below to discuss. If you haven’t already, join the forum to reply.
Page 1
    • eskbanker
    • By eskbanker 31st Aug 17, 4:20 PM
    • 10,358 Posts
    • 12,608 Thanks
    eskbanker
    • #2
    • 31st Aug 17, 4:20 PM
    • #2
    • 31st Aug 17, 4:20 PM
    The introduction of the Personal Savings Allowance will undoubtedly have had an impact but I'm not convinced that it's the sole factor, given the continuing decline of cash ISA interest rates (both in absolute terms and relative to other accounts) - the 2015/16 figures were already down on the previous year, although much less markedly than the drop seen in 2016/17.

    For anyone as nerdy as me who likes to see the raw stats for themselves, they're published here.
    • wymondham
    • By wymondham 31st Aug 17, 4:28 PM
    • 5,616 Posts
    • 10,493 Thanks
    wymondham
    • #3
    • 31st Aug 17, 4:28 PM
    • #3
    • 31st Aug 17, 4:28 PM
    Savings rates are awful. Policy is now to borrow and spend rather than save and thus there is little to encourage savings at all......
    • jimjames
    • By jimjames 31st Aug 17, 5:35 PM
    • 13,234 Posts
    • 12,297 Thanks
    jimjames
    • #4
    • 31st Aug 17, 5:35 PM
    • #4
    • 31st Aug 17, 5:35 PM
    Savings rates are awful. Policy is now to borrow and spend rather than save and thus there is little to encourage savings at all......
    Originally posted by wymondham
    Savings rates are not awful but they do need some effort to get the best. I get 4% on all my cash savings, way more than any cash ISA.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Rich2808
    • By Rich2808 31st Aug 17, 5:45 PM
    • 787 Posts
    • 649 Thanks
    Rich2808
    • #5
    • 31st Aug 17, 5:45 PM
    • #5
    • 31st Aug 17, 5:45 PM
    The taxpayer (well in theory the banks) does of course pay 8% interest - on PPI claims. And according to the latest figures almost none of those PPI refunds are being saved - about 90% is spent straight away.

    Not sure what the message is - spend and borrow don't save?
    • robin58
    • By robin58 31st Aug 17, 7:14 PM
    • 2,705 Posts
    • 3,269 Thanks
    robin58
    • #6
    • 31st Aug 17, 7:14 PM
    • #6
    • 31st Aug 17, 7:14 PM
    Well the banks don't want our money because of QE of the Bank of England.

    So they try to get us to get off their books so they can make more money lending the cheap loan money of QE for higher profit.

    It's bad that I can make more money taking it out of an ISA and buy something then to sell it at a profit for more money I would get in interest.

    What is going to happen when the cheap money goes. How are the banks and Government going to encourage us to save.

    All that is happening now is a non saving community which will rely on Government hand outs more and more into the future.
    Last edited by robin58; 31-08-2017 at 7:17 PM.
    The more I live, the more I learn.
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    How little I know.!!
    • Keep pedalling
    • By Keep pedalling 31st Aug 17, 9:36 PM
    • 6,529 Posts
    • 7,597 Thanks
    Keep pedalling
    • #7
    • 31st Aug 17, 9:36 PM
    • #7
    • 31st Aug 17, 9:36 PM
    Having looked at those stats I am surprised that the amount of cash going into ISAs is still twice the amount going into S&Ss ISA. Cash ISAs have been rather pointless for 8 or 9 years and I see no cause for alarm here, perhaps some savers are very belatedly realising the error of their ways, and putting their savings in more sensible places

    Despite the fact that far more money has been poored into cash ISAs over the years, gains in S&Ss mean that 54% of the total value is tied up in those ISAs.
    • brewerdave
    • By brewerdave 1st Sep 17, 10:24 AM
    • 5,595 Posts
    • 2,488 Thanks
    brewerdave
    • #8
    • 1st Sep 17, 10:24 AM
    • #8
    • 1st Sep 17, 10:24 AM
    A fixed Cash ISA my wife has, is maturing shortly -it has been paying 2.15% -the renewal offer is 1.09% for 2 years (or 1.60% for 5 years)!
    I don't think so!!
    It'll be going into her S & S ISA ASAP.
    • VT82
    • By VT82 1st Sep 17, 1:10 PM
    • 1,040 Posts
    • 878 Thanks
    VT82
    • #9
    • 1st Sep 17, 1:10 PM
    • #9
    • 1st Sep 17, 1:10 PM
    It's bad that I can make more money taking it out of an ISA and buy something then to sell it at a profit for more money I would get in interest.
    Originally posted by robin58
    It's really not. This is the foundation of how an economy works.
    • Joe_Bloggs
    • By Joe_Bloggs 1st Sep 17, 1:46 PM
    • 4,493 Posts
    • 1,583 Thanks
    Joe_Bloggs
    robin58 said:-
    It's bad that I can make more money taking it out of an ISA and buy something then to sell it at a profit for more money I would get in interest.
    1) This is what should happen in a capitalist economy ! Expect to be exploited if you are a sitting target, locked in to a habit of doing nothing. Don't rely on central bank monetary policy for interest rate returns given the QE. history.

    2) QE. has inflated asset prices/depressed interest rates. Central Banks are blatantly purchasing stocks and shares in competition with institutional and private investors.

    3) Am I wrong ?

    J_B.
    • wymondham
    • By wymondham 1st Sep 17, 3:54 PM
    • 5,616 Posts
    • 10,493 Thanks
    wymondham
    Savings rates are not awful but they do need some effort to get the best. I get 4% on all my cash savings, way more than any cash ISA.
    Originally posted by jimjames
    That's good, please let me know who they are and can I invest without limit and hopefully its not one of those temporary invest x a month up to Y etc.....
    • bail-in
    • By bail-in 2nd Sep 17, 7:59 AM
    • 150 Posts
    • 56 Thanks
    bail-in
    Savings rates are not awful but they do need some effort to get the best. I get 4% on all my cash savings, way more than any cash ISA.
    Originally posted by jimjames
    Is that 4% rate for fixed term or instant access. The higher rates for instant access tend to be only for small amounts. The highest instant access account I am aware of for high deposit amounts, up to 20,000, is Santander at 1.5%. Do you know of any others?
    • binaryuniverse
    • By binaryuniverse 2nd Sep 17, 8:30 AM
    • 812 Posts
    • 526 Thanks
    binaryuniverse
    Is that 4% rate for fixed term or instant access. The higher rates for instant access tend to be only for small amounts. The highest instant access account I am aware of for high deposit amounts, up to 20,000, is Santander at 1.5%. Do you know of any others?
    Originally posted by bail-in
    You need to have a few interest paying current accounts, and spread the money around them. Doing that you can get a decent average interest rate. For example, over 6 accounts, I'm currently getting 5.4% on my total balance.
    Caveat is that I'm also including reward account payments in that (well, it's money added on, isn't it?). Remove those and it's 3.9%.

    So it takes a little more setup work than simply dumping the lot in a Santander account. But once automated, I don't have to think about it too much.
    • TheShape
    • By TheShape 2nd Sep 17, 11:30 AM
    • 1,470 Posts
    • 1,332 Thanks
    TheShape
    Savings rates are not awful but they do need some effort to get the best. I get 4% on all my cash savings, way more than any cash ISA.
    Originally posted by jimjames
    That's good, please let me know who they are and can I invest without limit and hopefully its not one of those temporary invest x a month up to Y etc.....
    Originally posted by wymondham
    If you don't want to make the effort, you don't get the reward. That's your choice!
    • phillw
    • By phillw 2nd Sep 17, 4:28 PM
    • 2,367 Posts
    • 1,898 Thanks
    phillw
    It's bad that I can make more money taking it out of an ISA and buy something then to sell it at a profit for more money I would get in interest.
    Originally posted by robin58
    There has to be more profitable ways of earning money, or nobody would be able to afford to borrow the money that you are saving. Interest doesn't magically come from thin air.

    In the golden days when interest rates were better, you could still make more money doing other things. Although arguably those things led to the financial collapse.

    If you have more money than you can fit into 5% accounts and you don't know what to do with it, then you should find a decent IFA and pay them.

    How are the banks and Government going to encourage us to save.
    Originally posted by robin58
    Getting people to pay into auto enrollment pensions is one way. When we're out of the EU then the government look like they will relax/remove mortgage affordability checks. I don't think the well off middle classes are high on the priority list for them right now.
    Last edited by phillw; 02-09-2017 at 4:42 PM.
    • jimjames
    • By jimjames 2nd Sep 17, 6:54 PM
    • 13,234 Posts
    • 12,297 Thanks
    jimjames
    Is that 4% rate for fixed term or instant access. The higher rates for instant access tend to be only for small amounts. The highest instant access account I am aware of for high deposit amounts, up to 20,000, is Santander at 1.5%. Do you know of any others?
    Originally posted by bail-in
    Instant access and I have up to 20k in the accounts

    That's good, please let me know who they are and can I invest without limit and hopefully its not one of those temporary invest x a month up to Y etc.....
    Originally posted by wymondham
    I didn't say it was without limit but when 70% of the UK have under 2000 savings it would easily cover them plus anyone who has up to 20k or so. Your choice if you don't want to bother though, just don't moan that there are no decent rates available.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • msallen
    • By msallen 3rd Sep 17, 6:56 AM
    • 1,013 Posts
    • 1,266 Thanks
    msallen
    That's good, please let me know who they are and can I invest without limit and hopefully its not one of those temporary invest x a month up to Y etc.....
    Originally posted by wymondham
    Do you mean invest or save? As a single person you can easily save 30K+ at over 3% interest (more than double as a couple), without going anywhere near the Santander 123. A few hours work to set it all in place across multiple accounts then nothing else to do.

    Anything over that amount typically doesn't need to be in cash savings for the overwhelming majority of people who should be investing the rest.
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