Ditching my ISA

[Mr.Stu]

Natwest also slashed mine from 2% to 1.5%... Santander 3% now makes more sense but thats only up to 20k.

 

[Beerbaron]

Just seen my letter from HSBC.

Currently:
Gross rate 1.74%
AER 1.75%

Jan 2014:
Gross rate 1.59%
AER 1.60%

No real reason to keep my ISA going. All my spare cash is going on the mortgage from now on.

 

[DXP55]

I upped my mortgage payments and when had a lump spare I paid it off capital. - Mind you we had real mortgages then - Like 10% and it was a killer.- even though it had come down from 14% - paid it off a few years early and would recommend anyone who can to do it -

Now I have cash to spare interest rate is more than rubbish so started buying myself big boys toys .

Dave

 

[EdGey]

I received the same letter today Mr-White.

Will be looking elsewhere for options.

 

[BombayMix]

I don't know what that's got to do with my post but I'm well aware you're only allowed 1 ISA.

No, there no limit to the number of ISAs you can have but you can only pay in to one of each type per year.

 

[Energize]

With the current rate on inflation on things like food and gas in the double figures, you're probably better off burning the money for fuel than putting it into an ISA to depreciate in real terms.

 

[Mercenary Keyboard Warrior]

False... You can take money out and put it back in, but you're only allowed to deposit X amount per year. I see where you are coming from, but I have taken money out and put it back in later (I always come in under the top amount you're allowed to deposit)

You are allowed to pay in upto the ISA allowance, you add all the deposits up that are made. You can withdraw whatever you want.

You could pay in and withdraw £10 500 odd times to use up your allowance.
You could not pay in and withdraw it 1000 times in a year as that would exceed the annual allowance.

 

[Mr-White]

There's really no point discussing ISAs any more, they're pretty poor investments. We need to discuss alternatives !!!

MW

 

[Mercenary Keyboard Warrior]

Savings = for emergencies
Investment = for growth

You need investments to exceed inflation otherwise they are pointless having (unless they are the only way to limit decay from inflation).

Savings are not there to beat inflation they are there to provide a safety blanket.

Always have 3 months savings to cover essential bills. The more niche your role or better paid you are you should aim upto about 12 months. If you have a mortgage that allows draw down then less is ok but unless its a guaranteed draw down you are risking it by relying on it.

Its always better to pay off debt if the rates are higher than the best return you can get. Best ISA is 1.7%.

 

[Mercenary Keyboard Warrior]

Also may be worth noting that today the BOE started scaling back the main vehicle that killed interest rates, the Funding for lending scheme.
This basically lent silly cheap money to banks and building societies so they could lend it out (remember it was liquidity that caused the brakes on the global economy).

The BOE will now focus this mechanism on lending to small companies not individuals, this is more than likely the start of the end of ultra cheap money. As the banks and building societies need to start attracting cash in in order to lend it out to individuals the rates will start to creep back to a more sustained level.

 

[Thomas. PLease.]

It looks like HSBC in January are finally slashing my ISA rate by 38.2%, so it's time to ditch the banks for savings.

In one of the other savings related threads someone mentioned a website where you can invest money and specify a returns percentage by the level of risk, I'd be interested to take another look at that if anyone has the link ?

MW

I'd be interested to hear exactly what account you have and the rate its going from to.

 

[leicrao1]

My ISA is less than 1% and my mortgage is 3.2%. Im effectively tripling my gains every month.

Unlucky. Just signed up for 3% fixed cash isa, and mortgage is 1.39%. Plus 1% cashback on monthly mortgage direct debit through 321 account.

 

[Mr-White]

Source ?

You reckon interests rates will rise ?

MW

 

[Thomas. PLease.]

Unlucky. Just signed up for 3% fixed cash isa, and mortgage is 1.39%. Plus 1% cashback on monthly mortgage direct debit through 321 account.

Must be a 5-year fixed rate to be getting 3.00%? Enjoy watching interest rates rise well before that matures.

 

[Mr-White]

I'd be interested to hear exactly what account you have and the rate its going from to.

It's a standard eISA but I opened it in 2009 when the interest rates were higher, they're now cutting my rate from 2.75% down to 1.7%

MW

 

[leicrao1]

It's more because I am one of the lazy sods.

 

[Mercenary Keyboard Warrior]

Source ?

You reckon interests rates will rise ?

MW

That aimed at me?

if so http://www.bbc.co.uk/news/business-25137444

Its inevitable rates will go up, the question is when and how quickly.
BUT they were not going to shift whilst that scheme was in place pretty much guaranteed

 

[Thomas. PLease.]

It's a standard eISA but I opened it in 2009 when the interest rates were higher, they're now cutting my rate from 2.75% down to 1.7%

MW

Brill thanks!

 

[Energize]

Also may be worth noting that today the BOE started scaling back the main vehicle that killed interest rates, the Funding for lending scheme.
This basically lent silly cheap money to banks and building societies so they could lend it out (remember it was liquidity that caused the brakes on the global economy).

The BOE will now focus this mechanism on lending to small companies not individuals, this is more than likely the start of the end of ultra cheap money. As the banks and building societies need to start attracting cash in in order to lend it out to individuals the rates will start to creep back to a more sustained level.

The irony with that scheme of course being that no one can now save for a house because interest rates are so low lol.

 

[Mercenary Keyboard Warrior]

BBC added another article

http://www.bbc.co.uk/news/uk-25141366