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Q&A » ISAs
I opened an ISA with Norwich Union more than 7 years ago. It was a Higher Income account and paid an average of £35 p.m, now down to £25p.m. Moneyspider rate this account as a "D".
I would like to switch to an A rated account. How easy would this be, what are the charges to look out for and what monthly income could I expect?
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804Do you need the income to live on? With an ISA, it is much better to go for capital increase rather than income because there is no tax relief on income. Reinvest what income there is and your capital increases further. It is Capital Gains Tax that you avoid on an ISA.
Next I should say that very few Managers actually manage to beat the FTSE especially after their charges have been taken into account, including the Bid/Offer spread. It is better to go for Low-Cost Index Trackers or Exchange Traded Funds.
All funds are down this year but shouldn't be from 7 years ago. Have you, or they, been withdrawing some of the capital to maintain an income?
If your target investment period is 5-10 years, I would suggest an All-Share Tracker from Legal & General or Fidelity. If it is more like 15-20 years, I would go for a Global Tracker.
Mike
Posted on 18 September 2009 |
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804Sorry, I forgot to answer the bit about switching. You have to get the new provider to do the work because it has to stay withinin the ISA umbrella.
There is often an unaccountable delay in it happening - like maybe 2 months.
The terms and conditions of the provider should clearly state what charges are levied and when.
Mike
Posted on 18 September 2009 | Love 0 loves
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