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ISA News

11-04-2013

 

ISA News – Older people willing to take more risks with ISA’s

 

Michael Jordan reports for ISA News:

 

With ever dwindling interest rates it seems the over 55′s are more willing to take risks and invest in Stocks and Shares ISA’s than any other age group, according to a report by Standard Life.

 

The findings from their research show that although four times as many savers will put money away into a safe Cash ISA, the appetite for risk is growing amongst many. It says 6% of adults plan to invest more money into risky Stocks and Shares ISA’s in the new tax year than they did last year.

 

With the banks and building societies being so reluctant to offer a decent rate on basic deposit accounts, it is not surprising that people are looking for alternatives. The rates are so low that in real terms people are losing money as inflation erodes the value of their savings.

 

Those looking at taking risk really need to tread carefully, the mis-selling of investments has been rife over the past decade and a recent report by the FSA suggested that around 25% of investments could have been mis- sold. Anyone looking for a long term investment should consider a few important rules:

 

 

> How would you feel if a significant portion of your money was lost? Even low risk funds can mean 20-30% of your money disappearing, could you handle that?

 

> Can you put your money away for at least 5 years? You will need to leave your money for the long term to ride out the peaks and troughs of the market

 

> Speak to an Independent Financial Adviser and take time to consider your options. Never make up your mind after one appointment

 

Recent changes to the rules mean that IFA’s now need to be better qualified and adhere to a strict set of rules. That should at least give some peace of mind to would-be risk takers.

 

 

Author: Michael Jordan

 

Michael Jordan reporting for ISA News

 

This article for the ISA News was written by Michael Jordan who has over 20 years experience in banking with Barclays and NatWest. A qualified Independent Financial Adviser and Mortgage Adviser he is well placed to advise clients on some of our more complex mis selling cases.

 

You can contact Michael on  01204 894831

 

 

 

26.03.2013

Banks not giving proper ISA advice

 

High St banks are failing to give the correct advice to customers transferring and managing Cash ISA’s, according to a survey carried out by Which?

 

The survey involved three basic questions and somewhat disturbingly the banks answered all three questions correctly in only 9% of calls.

 

In one call a Yorkshire Bank adviser told the caller there was no limit on the amount that could be transferred from one ISA to another. The correct answer is £5640 for the tax year 2013/14. In another call to RBS the adviser there suggested that the customer should ‘just withdraw your funds, close the account down and transfer it over to somebody’. That would mean the customer losing their tax free allowance altogether!

 

This is really bad news for customers. In the current climate savers need to know how best to utilise their allowances to get the best possible return on their money and if they can’t get such basic advice from their banks then we really are in troubled times. It is time the banks stepped up their investment in training for staff in what are standard banking products.

 

It is not surprising that more and more customers have taken the decision to invest in Stocks and Shares ISA’s with so much confusion and misleading advice being given. The problem with Stocks and Shares ISA’s has been the level of risk, often meaning customers losing thousands of pounds they were simply not prepared for. It has meant the banks have had to deal with a whole new bag of complaints about mis sold ISA’s and mis sold investment bonds.

 

Which? goes on to give some basic advice about transferring a Cash ISA:

 

1 – Check if your new provider will allow you to transfer your old ISA over

 

2 – Check if by transferring your ISA away, your current provider will not charge you a fee, if for example you have a notice ISA

 

3 – Get a Cash ISA Transfer Authority from your new provider and complete it to make sure you retain all tax free benefits

 

4 – If you are transferring an ISA from the current tax year you must transfer the full amount but for previous years balances, its up to you how much of that you transfer

 

5 – It should take around two weeks for the transfer to complete

 

Author: Michael Jordan

 

Michael Jordan reporting for ISA News

 

This article for the ISA News was written by Michael Jordan who has over 20 years experience in banking with Barclays and NatWest. A qualified Independent Financial Adviser and Mortgage Adviser he is well placed to advise clients on some of our more complex mis selling cases.

 

You can contact Michael on  01204363979

 

 

05.03.2013

 

ISA NEWS – Time to up the Cash ISA limit?

 

Over the last four years the Bank of England base rate has remained at 0.5% meaning Britain’s savers have been hit hard with interest rates at a record all time low.

Michael Jordan reports for ISA News:

 

A quick glance at the best buy tables and it is clear to see that the rates for savers are pitiful compared to years gone by. To make matters worse, Charlie Bean, Bank of England Deputy Governor hinted recently that the base rate could even drop below zero to help kick start the economy. Although it is a difficult balancing act for the Treasury, ISA News feel this really would be a crushing blow for many retired people, heavily reliant on the income from their savings.

 

Traditionally the banks would take in deposits by offering attractive interest rates. They would then use that money to lend out to other customers, in the form of mortgages and business loans. The recent Funding for Lending programme introduced by the Government, to encourage banks to lend, means they have easy access to cheap funds giving them less incentive to offer attractive rates for savers. This along with the record low base rate means Britain’s savers are unlikely to see an upturn in their fortunes any time soon.

 

One of the consequences of the low rates has been the mis-selling of investment products to those seeking a better return on their cash. Banks have been eager to ‘guide’ savers down a route of taking money out of deposits and putting it away into risk based investments like Stocks and Shares ISA’s. The FSA recently reported that 25% of investments sales, made to its mystery shoppers were unsuitable, meaning many were exposed to risks way above what they wanted.

 

One thing the Treasury could consider however is increasing the ISA limit. At present savers can put away a maximum of £11,280 into a tax free ISA but only half of that can be in a Cash ISA, the remainder must go into a Stocks and Shares ISA. Allowing the full allowance to used for a Cash ISA would mean those not wanting to take investment risks would be able to squeeze that little bit extra from their hard earned money. It may also mean we see a reduction in the number of mis sold investments and mis sold ISA’s.

 

Author: Michael Jordan
Michael Jordan reporting for ISA News

 

This article for the ISA News was written by Michael Jordan who has over 20 years experience in banking with Barclays and NatWest. A qualified Independent Financial Adviser and Mortgage Adviser he is well placed to advise clients on some of our more complex mis selling cases.

You can contact Michael on  01204363979

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