ISA limit increased from budget

[SL350_SWINDON]

ISA limit increased - good. Rates still rubbish - poor. Get better returns on Santander 123 current account?

 

[st13phil]

Get better returns on Santander 123 current account?

...and don't forget you can have two of them

 

[tali]

Most of any ISA allowances needs to be in stocks/shares.

 

[C240Sport97]

from 1 Jul 15, your entire ISA allowance can be in cash, as can previous years ISAs.

 

[kinaero]

I am actually quite tempted by Santander 123 account! But I've been with Natwest for over 25years...and they've been ok with me, hmmm...

 

[Chrishazle]

Why leave cash in an ISA earning 2% when many reputable FTSE100 shares yield 3.5-5% - and you have the chance of capital growth as well!!

 

[renault12ts]

Why leave cash in an ISA earning 2% when many reputable FTSE100 shares yield 3.5-5% - and you have the chance of capital growth as well!!

...because people are sheep. They think 20% of nothing is worth having.

 

[renault12ts]

ISA limit increased - good. Rates still rubbish - poor. Get better returns on Santander 123 current account?

An ISA is not a product as such...so you can't say rates are rubbish...though I suspect you mean cash ISA rates which are rubbish.

ISAs are a tax free umbrella under which many types of investment, including direct share purchases , can be sheltered...and those "rates" aren't bad at all.

 

[SL350_SWINDON]

I'm already invested in a stocks and shares ISA. Want a safety net also with low risk savings.
Yes cash isa rates are poor.

 

[renault12ts]

I'm already invested in a stocks and shares ISA. Want a safety net also with low risk savings.
Yes cash isa rates are poor.

Flying under inflation isn't low risk...you're losing from day one. Get it all into s&s ISAs...but go for a cautious approach.

Care to guess how many negative years the 350 index has had in the last 35 years?

 

[norfolkngood]

The Chancellor has woken up to the fact that there is an election next year, and that savers have votes.

Bring on the decent interest rates???

 

[tali]

I would prefer rates as low as they are - mortgage wise.

 

[renault12ts]

The Chancellor has woken up to the fact that there is an election next year, and that savers have votes.

Bring on the decent interest rates???

B of E decides interest rates...they might start a very slow rise next spring.

 

[Dryce]

Care to guess how many negative years the 350 index has had in the last 35 years?

The number of negative years isn't the thing to look at.

It's the overall return over the long term offset by cost and *risk*.

Economically we are still in uncharted territory. We have a recovery of sorts. But it's not necessarily based on strong fundamentals - nothing has actually been fixed.

Tellingly interest rates are still being held down.

 

[Mercy1]

I would prefer rates as low as they are - mortgage wise.

Bet you do...! hope all you high earners with cheap mortgages are saying thank you to all of us scrimping savers who are being paid minuscule interest rates so that your debt interest stays low...!
All through my working life, savers' money was used to fund mortgages. Now, interest rates are kept artificially low to give borrowers low rates, which is bad enough for savers, but adding other mechanisms which have led to the banks having less need of savers' money, is even worse.
A lot of people relied on the interest on their pension lump sums (or whatever) to fund their day to day living. All taken away over the last few years. 'Snot fair!!
Anyway, nice the Chancellor has improved Isa and bond prospects - pity he waited until Isa providers slashed interest rates to next-to-nothing. Fingers crossed the banks may offer better Isa rates to compete for our money...

 

[Harrythedog]

I would prefer rates as low as they are - mortgage wise.

IMHO the mortgage rates aren't low in comparison to the B of E lending rate, can't remember a time when the Standard Variable Mortgage rate was 10 times the minimum BE lending rate. Just the Banks shafting the savers this time round

 

[Dryce]

IMHO the mortgage rates aren't low in comparison to the B of E lending rate, can't remember a time when the Standard Variable Mortgage rate was 10 times the minimum BE lending rate. Just the Banks shafting the savers this time round

The situation is a contorted.

I know plenty of people 40+ sitting on low mortgages tied to base. Little incentive for these people to move because new mortgage funds would be much higher.

OTOH those going out and rasing money on new mortages are faced with base + several % depending on circumstances. So the BoE rate is irrelevant to some extent.

If base rates went up to 3% or 4% I suspect that there are quite a lot of people who would find the situation untenable.

 

[tali]

Bet you do...! hope all you high earners with cheap mortgages are saying thank you to all of us scrimping savers who are being paid minuscule interest rates so that your debt interest stays low...!
All through my working life, savers' money was used to fund mortgages. Now, interest rates are kept artificially low to give borrowers low rates, which is bad enough for savers, but adding other mechanisms which have led to the banks having less need of savers' money, is even worse.
A lot of people relied on the interest on their pension lump sums (or whatever) to fund their day to day living. All taken away over the last few years. 'Snot fair!!
Anyway, nice the Chancellor has improved Isa and bond prospects - pity he waited until Isa providers slashed interest rates to next-to-nothing. Fingers crossed the banks may offer better Isa rates to compete for our money...

Thing is , i do save -in fact a lot more than i spend.But for me savings on the High St banks is just for rainy day.The crux of my savings i treat as investments and go into stocks and shares
Anyway , i have 2 high st everyday accounts that pay 3% , in fact my LLyods one was paying 4.7% when everyone was screaming about 0.1 % rates-although soon after i joined the buggers dropped it to 3% !
Personally i don't think the average Brit has enough in savings for intrest to be worthwhile as most them are with the Bank Of Wonga!

IMHO the mortgage rates aren't low in comparison to the B of E lending rate, can't remember a time when the Standard Variable Mortgage rate was 10 times the minimum BE lending rate. Just the Banks shafting the savers this time round

That does muddy the waters.I'm only paying 2.24% -still nearly 4.5 times B of E lending rate.*******s!

 

[renault12ts]

Bet you do...! hope all you high earners with cheap mortgages are saying thank you to all of us scrimping savers who are being paid minuscule interest rates so that your debt interest stays low...!
All through my working life, savers' money was used to fund mortgages. Now, interest rates are kept artificially low to give borrowers low rates, which is bad enough for savers, but adding other mechanisms which have led to the banks having less need of savers' money, is even worse.
A lot of people relied on the interest on their pension lump sums (or whatever) to fund their day to day living. All taken away over the last few years. 'Snot fair!!
Anyway, nice the Chancellor has improved Isa and bond prospects - pity he waited until Isa providers slashed interest rates to next-to-nothing. Fingers crossed the banks may offer better Isa rates to compete for our money...

Relying on interest rates to supply income is risky...better to buy dividend bearing shares and have a higher more consistent rate of return.

 

[Dryce]

Relying on interest rates to supply income is risky...better to buy dividend bearing shares and have a higher more consistent rate of return.

This sort of simplistic advice is risky.

If you have savings within the bank compensation limits then if interest rates go down your capital is untouched. You can choose to do something with it.

If you have shares then the value is based on sentiment and dividend levels. A poor dividend yield can knock down the capital value of the shares. So double whammy. And your choices on getting out of the situation may be limited as a result. (Conversely this is why shares can look good - you gain some income and if that income is healthy and sentiment is good then the capital value increases as well).