Spent the weekend walking the Chalkland Way with chums, and eventually got to chatting about personal finance and how, if like me, you have a tiny private pension, buying an annuity would fund about a pint of beer a day. As of next April, so I was told, the first £1k of any interest on your savings would be tax free. So why bother with a cash Isa?
Might as well get a Stocks & Shares Isa and hope the market doesn't dip and that any gains will be better than the sub 2% interest on offer at the moment.
Me...I'm spending it.
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Me...I'm spending it.
Fair enough but don't expect the State to bail you out. The future is going to be pretty grim for those without some savings.
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From a selfish pint of view, why not? I've worked and paid tax & NI for 43 years and I'm not 60 yet. In my retailing 'career' I've met plenty of lazy beggars who have contributed chuff all.
When my savings are gone, I shall downsize (I chose to have a large mortgage rather than pay into a private pension). And then spend the equity released. By which time in all probability I shall not be capable of doing the stuff I can now. That's if I'm still on top. Here's hoping I make it to 66 and the State Pension!
And beers cheap oop North. £2.40 for an excellent pint last Saturday in the Thompsons Arms, Flaxton.
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I stand to be corrected but ISAs are tax free anyway I believe so the £1k of tax free interest (from next year I think) would apply to savings other than ISAs.
I'd be happy for someone to confirm this: I'm currently 59 and not working (by design) and am trying to make sure I understand all the finance breaks and gotchas. Right now my plans are to definitely take the summer off but there is also a strong possibility that I am now retired :-)
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Same as me Smokie. I finish my current job end of this month. Never taken much time out in 40 odd years work, apart from 5 weeks in Oz shortly after my Father died in late 70s. Decided I couldn't live there, so carried on as before.
A busy few months ahead, doing stuff whilst I am reasonably healthy but if boredom sets in I will get another part time job or three this winter. My younger retired friends ( ex Fire & Police) are constantly busy enjoying themselves and don't need any part time work to interfere with their current lifestyles!
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So what with a trip to Florida, another small hol and a load of decorating and household jobs to catch up on, I've not yet found the real freedom of not working, but glimpses I've had confirm that you will need some interests (other than car4play!!) to fill your time otherwise boredom will soon set in.
At first I was firmly thinking I'd stop work. I'm certainly wavering a little now, but my return to work would be another well paid contract for a short burst , if I can get one, rather than anything part time, ideally over the winter so I keep warm at someone else's expense :-)
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When who ever is in power wants to really pay off the huge loans that the country has expect inflation to rise and along with it interest rates.
The £1k allowance is really £0.5k for higher tax payers anyway.
With interest rates at 3% the maximum amount in a cash ISA would generate £450 in interest for one year's allowance only. (My fixed rate ISA is 2% so its getting there.)
Money in a mini cash ISA now will be protected from tax on higher interest rates later on so is a good idea for some with cash to save but who don't want more risky investments.
Last edited by: zippy on Tue 19 May 15 at 12:25
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>>hope the market doesn't dip
An ever-present risk. Bonds carry less risk than shares and will pay out at par at maturity - so long as the issuer hasn't gone bust. Risk can be further reduced and spread by buying into a bond fund, a pool of many different bonds, although of course the fund itself can fluctuate in the market. A favourite example is Phoenix Fund Services (UK) Ltd. Twentyfour Dynamic Bond Gross I Inc. Nav. The current yield is about 5.75%. (The "Inc." - Income - probably means there is an "Acc." - Accumulation - version, i.e. with income reinvested, hence yields compounded, way to go if you have time in hand.)
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>> Bonds carry less risk than shares
So not so. So completely and utterly not so. (In a world where interest rates are likely to rise at some point in the future.)
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Bonds held to redemption are "safe" in that you know they will be redeemed at par (subject to credit risk as mentioned by ambo)
Longer dated bonds and bond funds of longer duration will drop in price when rates rise. Possibly by a lower amount than shares.
To me the telling point about bond prices at the moment though is that the risk is assymetric - prices have much more opportunity to go down, and further, than up. In practical terms, even if we get deflation, the BoE can't really reduce interest rates any further.
There's also the generally accepted risk that assets of different kinds are more correlated than is 'normal', owing to the pressure of QE. When the taps are turned off, the rising tide that has lifted all boats will recede and take them down again.
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>> And beers cheap oop North. £2.40 for an excellent pint last Saturday in the Thompsons
>> Arms, Flaxton.
>>
Cheaper still darn Sarf - £1.99, for well kept good tasting beers in several pubs within a 5 or 6 mile radius from me.
The Regent in Walton on Thames, The King's Tun in Kingston, The Cap in hand at Hook, near Surbiton.
Need I go on?
Last edited by: Duncan on Tue 19 May 15 at 16:44
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>> Cheaper still darn Sarf - £1.99, for well kept good tasting beers in several pubs
>> within a 5 or 6 mile radius from me.
>>
>> The Regent in Walton on Thames, The King's Tun in Kingston, The Cap in hand
>> at Hook, near Surbiton.
>>
>> Need I go on
Funnily enough, all of them Weatherspoons
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>> Cheaper still darn Sarf - £1.99, for well kept good tasting beers in several pubs within a 5 or 6 mile radius from me.
>> >>
>> >> The Regent in Walton on Thames, The King's Tun in Kingston, The Cap in hand at Hook, >>near Surbiton.
>> >>
>> >> Need I go on?
>>
>> Funnily enough, all of them Weatherspoons
Wetherspoons pay compensation to travellers refused admission to one of their pubs. Wetherspoons staff thought the travellers would cause disorder.
tinyurl.com/ou8r8gt
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The only bit of information I could find about this subject is, I'm afraid, on the D Wail (This is money) website. I would do a tiny url(?) link, but I invariably fail at the task.
In essence it's, "no tax will be deducted on the first £1,000 of interest earned every year on savings from April 2016".
I may be looking at this wrongly, but I make it that you could save e.g. £50k at 2% interest pa before you had to pay any tax. To avoid tax on greater savings than this, you would need to have it in cash ISAs.
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Mini cash Isas - CGNorwich
