ISA's...

Uther

Uther

Uther

Soldato
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Bit confused about these, but later this year we will receive some cash. Is it the case that each ISA is individual, so both my partner and I could stick 15k each in one?
And the following April open 2 new ISA's and stick the maximum in again?
Could our 17 year old son have yet another ISA, with another 15k in it?
I notice there are also stocks and shares ISA's, I assume these carry considerably more risk?
^^ Not money laundering... :p
 
Uther said:
Bit confused about these, but later this year we will receive some cash.
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Uther said:
Is it the case that each ISA is individual, so both my partner and I could stick 15k each in one?
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YES

Uther said:
And the following April open 2 new ISA's and stick the maximum in again?
Click to expand...
YES

Uther said:
Could our 17 year old son have yet another ISA, with another 15k in it?
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You need to be a UK resident aged 16 or over to open a cash ISA, or aged 18 or over to open a stocks & shares ISA.

Uther said:
I notice there are also stocks and shares ISA's, I assume these carry considerably more risk?
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yes - you need to consider the risk you are willing to take with the funds invested. Bear in mind a crap cash ISA rate has a different type of risk - inflation risk, i.e the money it makes in interest doesn't keep pace with inflation and thus the spending power of the money is reduce.
 
I know rates are crap currently, but our thinking is at least we won't lose so much as we would just keeping it in a current/savings account, or under the bed!
45k would make a small amount at least.
 
See above but also yes your son could also have an isa it's 16 + you have untill the 5th of April to fund this years isa before it's the new tax year. Some financial institutions have a range of different isas some with more limited access but a higher interest rate. As stated above your stocks and shares isa"s carry more risk but you can choose between low medium and high risk. Obviously higher the risk but potentially higher reward. Cash isa no risk to loosing money but a lower rate. Also worth noting if next years isa is a higher rate and has a transfer in facility you could actual combine this years USA with next years allowance to receive the higher interest on all of your tax free savings. Sorry for punctuation on iPhone :p
 
Rates have been savaged :( mine are making almost half the interest they were a year ago - which was low but not insignificant now they are so low I'm almost considering looking into chucking half of it in a low cost index tracker using an ISA wrapper.
 
Some current accounts are paying more interest than ISAs at the moment even after tax - Nationwide and TSB have 5% Gross (4% for basic and 3% for higher rate tax payers). They only allow £2,500 and £2000 each respectively though.

Santander offer 3% upto £20K which is still 2.4% basic payer.


Currently my ISA gives me 2.5% (obviously no tax on it). So its one of the best out there albeit this is coming to an end in April so looking for where to go after that.
 
So it might actually be better to put the money in to a current account and take the tax hit rather than a tax free ISA! Doesn't seem to make much sense really.
 
You'll lose this years allowance though if you do that, you'll never get that back when rates start to improve.

It's also worth noting that you can now (or from next year?) start putting peer to peer lending into an ISA. Ratesetter is currently giving 3.4% on 1 year bonds with essentially no risk to give you idea of the rates you can get, higher with more risk.
 
Uther said:
I know rates are crap currently, but our thinking is at least we won't lose so much as we would just keeping it in a current/savings account, or under the bed!
45k would make a small amount at least.
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There is a school of thought that suggests it is worth building up an ISA stockpile so you can make hay when the rates go back up. However, in my view this was more applicable when the limits were much lower i.e. around £3-5k range. This meant that every year you didn't max out your ISA was a missed opportunity as you would have less built up for future years. I guess some people might have amassed like £100k (cash only) by now?
But now with the £15k limit there are probably fewer people who can put away that much cash every year so there is more capacity to 'catch up' (assuming you can't invest the full amount anyway i.e. you'd put your cash in something more profitable in the short term and then whack it in an ISA in future if there is sufficient capacity, whereas in years gone by you'd have too much cash to fit in the ISA).
Conversely of course one could argue that a £15k limit makes it even more of a missed opportunity if you don't fill it.....
 
Jokester said:
You'll lose this years allowance though if you do that, you'll never get that back when rates start to improve.

It's also worth noting that you can now (or from next year?) start putting peer to peer lending into an ISA. Ratesetter is currently giving 3.4% on 1 year bonds with essentially no risk to give you idea of the rates you can get, higher with more risk.
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sounds dubious...
 
dowie said:
sounds dubious...
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They're not protected by the FSA, but Ratesetter has a fund to cover loses so you get the rate shown. The likelyhood of the fund ever failing to cover all the loses is astronomically small. Funding circle and the like don't have this so you are taking some risk that your loans go bad and why they're set up so you spread the risk across multiple loans if you want to, which reduces your exposure.
 
Jokester said:
They're not protected by the FSA, but Ratesetter has a fund to cover loses so you get the rate shown. The likelyhood of the fund ever failing to cover all the loses is astronomically small. Funding circle and the like don't have this so you are taking some risk that your loans go bad and why they're set up so you spread the risk across multiple loans if you want to, which reduces your exposure.
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it is your claim of 'essentially no risk' that is a bit dubious

people made that assumption with CDOs too... and we know what happened there

there is obvious risk involved here, that risk is reflected in the increased return you'll get... whether that increased return is sufficient to compensate for the increased risk is another matter

but 'essentially no risk' is utter nonsense
 
You can only have 15500 or whatever the figure is but you can have that split over a number of isas
I have 2 isas for example, One stocks and shares and one standard bank one
 
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