ISA Account, is there any benefit really ?

7
Found 31st Mar
Went to barclays today.. they said I have ISA allowance of 20K...

I am not ever interested in stocks etc...

Is there any other benefits of such account ?

Thanks
Community Updates
  1. Ask
Groups
  1. Ask
7 Comments
Its tax free savings, not the best rate of return but generally risk free. If you have money sat in a normal account you may get a better rate
From my understanding you need to be earning over £1000 interest to benefit.
If its offering a high interest return on the isa then its worth considering but normally other investments will offer better returns.
Don't take my words for gospel.
Original Poster
Oh, sorry I forgot to mention, I can't deal with interests too, so nothing really is it in ISA for me then lol
At the moment, if you have modest savings and you are far from retirement, then the benefits of a CASH ISA seem obscure.
There are some good reasons to use your allowance.
1 The obvious one, If you are a higher rate taxpayer your tax free interest is only £500, so you can save tax on any interest owned over £500.
2 If you are close to retirement and will get an occupational (work) pension. People forget that you don't escape income tax after you retire. So, if you add your occupational pension to your state pension and it takes you over the tax threshold, you will be paying tax on any interest which exceeds the £1000 (500 for higher rate). If you have stashed your lifetime of savings into an ISA, all of the interest income is tax free.
3 Ahh, I hear you say, I'll never have enough savings to collect more than a £1000 interest, this is a rich person's problem. But, we forget, in the not too distant past, interest rates on savings accounts were up to 15% and for quite a long time you could get 10%. SAy, your life savings are 25000 right now, currently you'd be lucky to get £250 interest, so no tax. Put savings rates up to 10%, your interest is now £2500, and you will pay tax on £1500 of that. Of course, if you've been stashing your savings into an ISA over the years, there's no tax to pay, ever.
It's all about taking the long view.
Edited by: "airbus330" 31st Mar
at the moment probably not much in it as interest rates are so low so a cash ISA is not attractive, but you may wish to hold it as a hedge for when interest rates go higher and so the interest that you get will be taxed, or if they decide to change the £1,000 criteria before you are taxed.

you could also fall into the high earner band where the £1,000 is only £500, if not now, later you may possibly do?
rootikahoo3 h, 21 m ago

Oh, sorry I forgot to mention, I can't deal with interests too, so nothing …Oh, sorry I forgot to mention, I can't deal with interests too, so nothing really is it in ISA for me then lol


The only ISA that may be of any actual use is the help to buy ISA, where they give you 25% extra on top of your savings upto £3000 if you are a first time house buyer.
ISA’s are basically now just for the rich to put money in to avoid taxes. I mean, who has £20k to save each year?
Edited by: "SteMoss" 1st Apr
Post a comment
Avatar
@
    Text

    Top Discussions