![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
The tax free allowance is set by HMRC and not the bank. Even if they barred you from making a deposit throughout the next tax year your allowance would remain available for use with another bank.
Stupid ISA questions
- Thread starter Shicky
- Start date
The tax free allowance is set by HMRC and not the bank. Even if they barred you from making a deposit throughout the next tax year your allowance would remain available for use with another bank.
There are plenty of long term gilts which, whilst trading at a premium just now, will give you >6%. Or go for a corporate bond (I've got a few thousand units of LB1G which, post-suspension, returns >7.5% and is trading < £1.00.
Exactly, trading at a premium. I.e. we've had the peak, here comes the trough. Gilts and Index-Linked gilts funds romped home last year returning on average around 20%. This year, they will tank as the market normalises.
Corporate bonds are a whole other kettle of fish. They usually have much higher yields as their issuers are significantly more susceptible to a default. They are not comparable and they are still an attractive opportunity for the income seeking investor. But then, if you're going for corporate bonds, you may as well look at high dividend equities as they're just a different medium for achieving the same objective at a different risk/return level.
Soldato
May as well hijack to check something... I can transfer to my ISA max £5640 (cash) at 00:00:01 on 6th April?
Soldato
I've gone with a BestInvest Select S&S ISA for the current year to dip my toe into the world of self-picking S&S. I see S&S as being a 5 to 10 year investment, so will also save some money into a cash ISA for shorter term returns.
I have a possibly stupid question regarding ISA's and that is why does anyone really bother with them?
The rates are so pathetic I personally don't even bother looking for the best deal, rather the most convenient for my stash of emergency funds. I mean the difference between an ISA at 2.97% and 3.07% for £5340 is so unbelievably tiny its simply not worth my time and both are well below inflation, so frankly its an insult. I simply assume most people like an easy way to store their wealth in a perceived 100% risk free environment (or as risk free as bank credit can be!).
Personally I prefer slightly riskier investments and assets (ETF's and stocks) as these actually pay something back although I do gather they may not be eveyones cup of tea. I do intend to have a dabble with ratesetter this year and I would like to hear anyones opinions on this if they have tried it before? (They claim 7.7% which will be subject to tax but I will still get at return of 6.4% with that taken into account - ie WAY more than an ISA).
The rates are so pathetic I personally don't even bother looking for the best deal, rather the most convenient for my stash of emergency funds. I mean the difference between an ISA at 2.97% and 3.07% for £5340 is so unbelievably tiny its simply not worth my time and both are well below inflation, so frankly its an insult. I simply assume most people like an easy way to store their wealth in a perceived 100% risk free environment (or as risk free as bank credit can be!).
Personally I prefer slightly riskier investments and assets (ETF's and stocks) as these actually pay something back although I do gather they may not be eveyones cup of tea. I do intend to have a dabble with ratesetter this year and I would like to hear anyones opinions on this if they have tried it before? (They claim 7.7% which will be subject to tax but I will still get at return of 6.4% with that taken into account - ie WAY more than an ISA).
If the cash is just laying around and you dont have anything better to do with it at that point in time then why not? I argee with you regarding fixed-term things but the question regarding an easy-access ISA is more 'why not' than 'why'.
It's also protected from tax as long as its in there - so if interest rates are much higher in 10 years time and you've been putting £5k every year it becomes useless. The tax saving can be quite a lot if you are a higher rate tax payer, for example.
People who are into investments will obviously have other cash around they just want hanging around rather than tied up. Why wouldnt you put it in an easy access ISA?
Also, 3.3% is not 'well below' inflation. It's actually 0.5% (or 0.1% depending on your measure of choice) below inflation.
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Like I said I dont work in a bank where this is the case so I have limited knowledge on it however I have had customers come into my branch annoyed because of this situation so yes. I will try to find the isa now
If its a fixed rate with a lock in I can understand but even then you can normally transfer out with and pay a penalty (normally wont be worth it though). Future allowances cannot be locked out by a lender although they could in effect do it with T&Cs that required you to say deposit your annual allowance to maintain a highly preferential rate.
Remembered what the "issue" I had with Santander was, its that you cannot use the current ISA for transferring existing Santander ISAs. But thats next years problem.
Not had mine confirmed yet, hope for that tomorrow.
Thing I am unsure of at this point is how I am supposed to fund it, I had to put bank details in or say I would send a cheque. I am not sure if they are going to do the transfer automatically or I need to do it myself, was far from clear when completing the application. Will see once I get confirmation its been setup and the 6th comes along.
Soldato
Thought so - just NatWest online banking being obtuse and not letting me schedule a transfer for 6th then. Grrr.[TW]Fox;21611316 said:
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Is anyone really hot on ISA transfer rules. My understanding is as follows :
Previous years ISAs, can transfer and split as you want. IE can consolidate, split across multiple lenders.
Current years ISA, you can only transfer what you have put it in one go (ie the whole amount)
Anyone in the know agree with the above?
Secondly specific questions I haven't been able to find clear answers to anywhere.
1) If I combine the current year and previous years ISAs into one, can I then remove the prior years element from an this joint fund, or have I effectively locked them together due to the limitations on current year ISAs
2) If I move the current year ISA but it hasn't been fully funded so far this year, am I frozen out from further contributions because of the "you can only fund one ISA per tax year" limitiation.
Not too bothered about Q2 since I will be fully funding from day 1. What I am pondering is combining, hence Q1, I am going with the Santander 3.3% Direct ISA, but its a 12 month term and means that probably on the 6th or so of April 2013 the preferential rate will stop, which means I could be losing interest for a fortnight or so whilst I sort a new ISA, especially as Santander look a little iffy in transfering from themselves to themselves.
Previous years ISAs, can transfer and split as you want. IE can consolidate, split across multiple lenders.
Current years ISA, you can only transfer what you have put it in one go (ie the whole amount)
Anyone in the know agree with the above?
Secondly specific questions I haven't been able to find clear answers to anywhere.
1) If I combine the current year and previous years ISAs into one, can I then remove the prior years element from an this joint fund, or have I effectively locked them together due to the limitations on current year ISAs
2) If I move the current year ISA but it hasn't been fully funded so far this year, am I frozen out from further contributions because of the "you can only fund one ISA per tax year" limitiation.
Not too bothered about Q2 since I will be fully funding from day 1. What I am pondering is combining, hence Q1, I am going with the Santander 3.3% Direct ISA, but its a 12 month term and means that probably on the 6th or so of April 2013 the preferential rate will stop, which means I could be losing interest for a fortnight or so whilst I sort a new ISA, especially as Santander look a little iffy in transfering from themselves to themselves.
Associate
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- 23 Nov 2009
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Correct.
The amounts are still seperate, even though they are in the same wrapper. If an ISA includes current and past years money, you have to treat the two amount seperately.
When you do this, your "one isa" is transferred so that the new account is your "one isa per tax year". What you cannot do is put money into ISA 1 and then put some more into ISA 2. You can transfer ISA 1 into ISA 2 and then add more money because your current year ISA is now ISA 2.
Because they are currently the most reliable on balance highest returning saving scheme. Most of the e-saver and other guaranteed schemes have tanked (there are still some with 3.8-5.2% introductory offers but they will drop to ~0.5% pretty quickly) and anyone trying to invest in any scheme based on the stock market at the moment is either extremely short sighted/stupid/naive or has a head for it and can micromanage their way to a decent investment (or atleast minimize their losses) - but they really aren't a good idea for just any one - a lot of the real gains to be made from them atm is betting on the long term.
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Thanks, really appreciate that. They were the replies I was expecting.
It's really not that difficult to build yourself a portfolio that can ride the ups and downs of the financial markets, and you certainly don't have to micromanage it to get the best out of it. In fact, there's significant research showing that the more changes you make, the lower your return, due to transaction costs.
A good way to go is to build a portfolio of cheap whole-of-market tracker funds, blended with bond funds to reduce volatility. Pay in monthly, rebalance annually, and leave it for 20-30 years, and you'll do well.
A good book for people wanting to get into sensible investing is called 'Smarter Investing' by Tim Hale.
Right now is a great time to invest in shares because on the whole, they are trading at cheaper than their long term averages suggest they should be trading at.