The Tax Year Endeth Soon...ISA Options? David Drummond

#1
I am wondering what to do when the ISA window opens in April.



I have approximately £15k all ready to invest somewhere...but where? I already have a 123 Santander account stuffed to the gunnels with £20k+ and so I am thinking I should be looking at maybe opening a new ISA with this 15k.



I already have two maximum Fixed Rate ISAs (15k each) with the Coventry BS and at excellent rates. Could I open a 3rd with them? Any advice would be gratefully received (maybe Martin is about to upload a special Blog entry on the topic, in which case...apologies) Thanks for your help!

#4



I am wondering what to do when the ISA window opens in April.



I have approximately £15k all ready to invest somewhere...but where?!
Originally posted by David Drummond


I think you might mean save not invest. If you want to invest then Santander isn't a good place to look. If you do want investments then post back and I'm sure you'll get some ideas but ultimately waiting till the end of the tax year isn't a great idea when you can get a whole 12 months of income and growth by starting in April

#5
There are a number of options but not enough info in your post for people to give you the best options in your case. Firstly what is your savings objective for the money you have/will have saved in Santander and the ISA's?

#6
Well my only objective for the money in Santander and the ISAs is to try and make it work and grow. I have no specific purchases in mind, I just want to get the best deal on interest free growth on these sums. I do not have any credit card debt or loans to clear and want to build up my nest egg for retirement and my chief plan there is to travel more. I am too nervous to invest in stocks and shares, especially with the volatility of markets due to Brexit. I have slowly built up the 15k over this year so I am looking to find a home for it within any new ISA products that may be coming available from April. I am not interested in opening another bank account that offers 3% for just a year providing you pay in a specific amount and move standing orders etc, I want something that will keep on giving a good rate. Perhaps such an option does not exist - hence my question here. If you need further details of my situation, please let me know.

#7



I do not have any credit card debt or loans to clear and want to build up my nest egg for retirement and my chief plan there is to travel more. I am too nervous to invest in stocks and shares, especially with the volatility of markets due to Brexit.
Originally posted by David Drummond


Overwhelmingly, the vast majority of people's nest egg for retirement in the UK comes from pension assets and income which has been funded by investing in funds holding stocks and shares around the world, over the working life.



Commonly this is done within pension funds paid for by employees and/or employers. If those pension funds stopped investing in stocks and shares-based funds entirely every time there was some potential uncertainty in one of the world's economies they would not have a cat in hell's chance of reaching a suitable position by the time the individuals were ready to draw their income. If the money only grew at or below the level of inflation, rather than at inflation plus three to five percent, the individuals would probably need to contribute over 50% of their income over a 40 year career to have a 50% income available over a 40 year retirement.



If you are not interested in investing, and you are not interested in saving in accounts which have higher interest rates on relatively small amounts of money, and your stipulation is that you want to use ISA products to avoids potential tax on the interest income, then you are looking at maybe a percent or so of interest a year at the moment.



With inflation likely to be 2% or more over the coming year, depositing cash in an account paying a net return of only half of that is a terrible way to prepare for retirement, unless retirement starts in the next couple of years and is only going to last a few years from then.






I want something that will keep on giving a good rate. Perhaps such an option does not exist - hence my question here.


You are right - if you define "good rate" as "at least as much as inflation" ; or even better, "above inflation, to build real-terms wealth for retirement"... then there is no option which will do that on a risk free cash deposit which will "keep on doing that" indefinitely or that doesn't require you to jump through some hoops to take advantage of short term deals from time to time.



Good luck with your search for the perfect account. If there was one, there would be lots of threads about it, although it would probably close rapidly to new customers for fear of losing lots of money by paying over the market rate.

#8



Well my only objective for the money in Santander and the ISAs is to try and make it work and grow. I have no specific purchases in mind, I just want to get the best deal on interest free growth on these sums. I do not have any credit card debt or loans to clear and want to build up my nest egg for retirement and my chief plan there is to travel more. I am too nervous to invest in stocks and shares, especially with the volatility of markets due to Brexit. I have slowly built up the 15k over this year so I am looking to find a home for it within any new ISA products that may be coming available from April. I am not interested in opening another bank account that offers 3% for just a year providing you pay in a specific amount and move standing orders etc, I want something that will keep on giving a good rate. Perhaps such an option does not exist - hence my question here. If you need further details of my situation, please let me know.
Originally posted by David Drummond


I've got all the current accounts and regular savers; gives me 3%-5%* on a sum of money greater than yours. Given that this takes up about 20 minutes of my time to manage each month I'm not sure why you wouldn't consider it?



* Soon to be 2%-5%



I twigged later in the day than most regarding investments; opened a S&S ISA about 6 years ago, best thing I ever did.



TBH, you're not going to "grow your wealth" in real terms using only savings accounts or cash ISAs, (unless things change), (IMHO), so maybe reconsider?

#9



Well my only objective for the money in Santander and the ISAs is to try and make it work and grow.
Originally posted by David Drummond







I am too nervous to invest in stocks and shares, especially with the volatility of markets due to Brexit.
Originally posted by David Drummond


These two statements are pretty much mutually exclusive. You don't grow the capital for cash savings, it reduces through inflation. You get some interest but generally it's less than inflation. Yes, S&S capital value will vary but there's a reason that almost all pensions will invest in them - long term S&S are the best way to build your wealth.






I just want to get the best deal on interest free growth on these sums.
Originally posted by David Drummond


Did you mean tax free? If you want your money to be interest free then cash ISAs are ideal for you

#10



Well my only objective for the money in Santander and the ISAs is to try and make it work and grow.
Originally posted by David Drummond


Its not going to happen. Inflation will eat it away over time. At best you'll stand still.






I am too nervous to invest in stocks and shares, especially with the volatility of markets due to Brexit.
Originally posted by David Drummond


So invest outside the UK then. USA, Europe, Asia. If you think Brexit means UK shares will do badly, then that doesn't affect non UK shares. There is such a thing as being too careful






I want something that will keep on giving a good rate. Perhaps such an option does not exist - hence my question here. If you need further details of my situation, please let me know.
Originally posted by David Drummond


Yes, you're right, it doesn't exist.



How old are you / how long until you plan to retire ?

Who is online

Users browsing this forum: No registered users and 1 guest