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Q&A » ISAs
I have used up my allowance for cash ISAs for this year and the previous year. They are currently earning 3%. I am considering moving the money to a NS&I inflation-beating bond. What are the pros/cons of doing this? Many thanks
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32Any money you move out of ISA's is tax free investment that you cannot get back so your future investment strategy with regard to tax efficiency should be taken in to account, NS&I index linked certs have a 15k maximum. As for ISA vs Inflation proofing you would need a crystal ball to know for definite where and when interest rates for savers and inflation rates are going in the medium term. Bear in mind the NS&I certs are structured as a 5 year investment.
Posted on 22 August 2011 |
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1You could consider lending peer to peer (eg. ZOPA, Funding Circle and earn a bettre rate such as 7%) or you may want to put money into a corporate bond from a household company for diversification - for example BT Bond 2028 matures in that year but pays a yearly interest at 5.75% for a minimum invseetment of £1,000.
Posted on 23 August 2011 | Love 0 loves
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878You can open an ISA and keep it before you go but you won't be able to add to it while you are abroad.
Cash ISAs and cash deposits do have poor rates because of the very low Bank Rate. Are you investing long term or short term? Long term would be better mostly in equities, with some NS&I Index-linked certificates.
Mike
Posted on 24 August 2011 | Love 0 loves
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0Thanks Mike, I am aware about the ISA rules so I've just set up a 4 year fixed term one and transferred my old ISA into it. Altho I knew I couldn't invest in it while I'm away, I also wasn't sure how easy it would be to set up a new one out of the country hence the longer term view.
I'd happily invest in the NS&I 5 year certificate but I'm not sure about the rules on that if I move abroad so if you know anything about that, that would be great.
Posted on 24 August 2011 | Love 0 loves
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878ses
The problem you have when abroad is the identity checks on opening new accounts. Once you have accounts with savings providers, you could well be able to open new accounts with them. It depends on how much re-checking they do, if any. There is no need for them to do anything when re-investing money that they already have.
However, you need to retain a UK forwarding address (that could be parents or friends or tenanants if you let out your place) and a UK bank account.
I haven't read right through the rules for NS&I but would not expect them to be worse than for ISAs and it is a 5 year account.
Mike
Posted on 30 August 2011 | Love 0 loves
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