MSE News: Savers abandon cash ISAs in wake of new tax rules

MSE_Luke
MSE_Luke Posts: 295 MSE Staff
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in ISAs & tax-free savings
The amount of new money saved in cash ISAs has dropped by a third in the past year...
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'Savers abandon cash ISAs in wake of new tax rules'
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Comments

  • eskbanker
    eskbanker Posts: 30,920 Forumite
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    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
    wymondham Posts: 6,354 Forumite
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    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
    jimjames Posts: 17,592 Forumite
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    wymondham wrote: »
    Savings rates are awful. Policy is now to borrow and spend rather than save and thus there is little to encourage savings at all......

    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
    Rich2808 Posts: 1,331 Forumite
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    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
    robin58 Posts: 2,802 Forumite
    edited 31 August 2017 at 8:17PM
    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.
    The more I live, the more I learn.
    The more I learn, the more I grow.
    The more I grow, the more I see.
    The more I see, the more I know.
    The more I know, the more I see,
    How little I know.!! ;)
  • Keep_pedalling
    Keep_pedalling Posts: 16,585 Forumite
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    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
    brewerdave Posts: 8,506 Forumite
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    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
    VT82 Posts: 1,079 Forumite
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    robin58 wrote: »
    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.
    It's really not. This is the foundation of how an economy works.
  • Joe_Bloggs
    Joe_Bloggs Posts: 4,535 Forumite
    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
    wymondham Posts: 6,354 Forumite
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    jimjames wrote: »
    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.

    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.....
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