Isas

[woolleysheep]

should they be stopped as they only benefit the better off

[Connemmara]

sorry meant to extremely disappointed

[SlackAlice]

Connemmara
I'm with you on this one. I try to re-assess my ISA's on a yearly basis and switch them when they do the dirty and reduce the rate.
Just got today a letter advising me the rates were being cut, so I'm surfing round the deals at this very moment.

[woolleysheep]

bus passes ,winter fuel payments which only compaensate for one of the worst pensions in the ec are all under cosideration for taxation why not isas

[Sipowicz]

Is this a wind-up?

[Connemmara]

Alice - never knew you looked into them every year to get a better deal until my friend me told just last Friday - oh I'll be down to Santander this week. By the way what way do they go - ie if the ISA are with Santander - for eg Nationwide offer a better rate - how do you go about changing it - do you lift your money or what or - what do you do changing them.

[Gizmonster]

To be honest, people aren't saving a huge amount with the tax-free staus that comes with an ISA, but it all helps.
If you've managed to stash away £50k in an ISA and currently get 3.0%, then the gross interest on that would be £1500 each year.
If you're a 20% tax payer and had to pay tax on this, your net amount would be £1200 and if you're a 40% tax payer, your net amount would be £900.
Savings of £300 a year, for a basic rate tax payer and £600 a year, for higher rate tax payers are not exactly huge amounts in my opinion.

[2sp_]

Connemmara, try http://www.moneysavingexpert.com/

Lots of good advice and tips on the best deals and how to go about moving your ISA about.

[SlackAlice]

Connemara
There's currently a thread running on this now here

http://www.theanswerbank.co.uk/Business-and-Finance/Personal-Finance/Question1224298.html

Have a read with a special look at the link emeritus gave which explains it much better than I could.

[New Judge]

You ask the new provider to contact the old provider and transfer your funds to them. (You have to fill in a form to do this). It takes from two to four weeks. It ends up with the losing bank sending a cheque (YES, a cheque!!) to the gaining bank and HMRC regulations will not allow it to be done by inter-bank transfer.

BEWARE - do not draw the funds out yourself and then take them to another bank to invest in an ISA. As soon as you do this the funds lose their tax-free status and it cannot be recovered. You can only do it via the transfer process I outlined above. Two other things: not all banks allow such transfers in (though the losing bank cannot prevent you transferring out) and doing this does not effect your new ISA allowance for the current year (so you can make such a transfer and still open a new ISA up to the existing limit).

[Connemmara]

thanks will look at those links later -have to do a wee bit of volunteering work in CUnion tonight and have to look my best for my punters. Can I mention Credit Union gave 4and half percent on their savings last year ie for £10,000 I made £450 for one year. That is what I call interest. replies before I go - thanks -

[smurfchops]

connemara you should have moved them at the end of the tax year otherwise the provider puts them in a low interest account. You could be getting around 3.5%. You must let your ISA provider transfer them on 5th April !

[Connemmara]

thanks judge and smurf - will go now - talk to you later. bye for now

[woolleysheep]

thanks for the tax brake quote - o% tax = payer zero
20% tax =20% benefit
40% tax =40% benefit
45% tax =45% benefit
does it help the better off

[SlackAlice]

can you explain the relevance to ISA's, I seem to have missed it?

[woolleysheep]

tax free interest

[2sp_]

I've been poorer than poor, and when I was I can honestly say that I had no problems with people using ISAs.

Now I have a bit of money, through hard work and savings, I use ISAs to make my money go further and invest in my future so that I don't have to rely on the State to look after me in my old age.

[factor-fiction]

Are you aware, wooleysheep, that the money individuals pay into ISAs generally comes from after-tax income, so the money has already been taxed.
Are you also aware that a significant portion of those holding ISAs are now pensioners on modest incomes who rely on the modest interest, together with the occasional drawing down, to fund their day to day costs.
So would you be happy for these pensioners to be the main targets of your suggested change, woolleysheep?

[atalanta]

Actually the very very well off do best from these savings. By that I mean the bankers, because they offer a lower rate for tax-free savings than they do for similar accounts which are subject to tax, and they grab the difference. So the bankers win again.
Sorry, I spelled " bankers" wrong.

[factor-fiction]

>"So the bankers win again."
Which bankers, atalanta? Do you mean anyone who works for a bank- call centre staff, counter staff, admin staff, IT staff?

[Connemmara]

Now I am back - to Judge thanks for that information - because I would have been stupid enough to ask for a cheque to go to another bank/building society or whatever. Now my next wee question is how do I go about checking out better rates online - thanks