With only days to go before the launch of the tax-free Junior ISA, the Coalition's replacement for the Child Trust Fund, High Street banks seem completely underwhelmed.
RBS will have one available by the end of November. HSBC is "building" its version. Maybe it'll be ready by the end of the year.
Santander has nothing in place: it's "considering options". And Barclays has "nothing lined up".
Why? If these banks thought the product would be a big seller, you'd have thought they would have something in place for zero-hour.
So probably they don't think huge sums are likely to be invested.
Unlike Child Trust Funds, which were turbo-charged with £250 from the taxpayer, there is no free money on offer to tempt parents to open the new ISAs.
Of the big players, only Nationwide Building Society is a contender. Its Junior Cash ISA, on offer from 1st November, will pay 3% including a bonus for the first year.
UPDATE: Halifax
and Bank of Scotland say they will be offering a Junior Stocks and Shares ISA in November
2011, likely to be later in the month.
Showing posts with label Cash ISA. Show all posts
Showing posts with label Cash ISA. Show all posts
Wednesday, 26 October 2011
Friday, 23 September 2011
Sharp losses for savers and pensioners who depend on shares
The yo-yoing stockmarket is wreaking havoc with the savings of millions of people.
A typical pensioner retiring today on a personal pension will get 14% less than he or she would have received at the beginning of January.
A small investor who had put away money in a tax-free shares ISA has seen the value of the investment drop by 12%.
Figures complied for the BBC today show the impact of gyrating share prices on savers who have hitched their wagon to shares.
A 65 year-old who had saved £100,000 in a personal pension pot would use the money to buy a retirement annuity, a guaranteed income for life.
But the pot has dropped in value to £91,840 since the start of the year. So the prospective annuity income has fallen from £6,497 to £5,571, a cut of 14% in 9 months.
More than 400,000 buy annuities each year.
A saver who held £10,000 in a shares ISA is likely to have seen its value slip to £8,777, based on the average value of unit trusts which invest in a basket of shares.
HMRC tells me that 3.4 million investors subcribed for stocks and shares ISAs last year.
The figures come from pension experts, Hargreaves Lansdown, and the savings information group, Moneyfacts.
A typical pensioner retiring today on a personal pension will get 14% less than he or she would have received at the beginning of January.
A small investor who had put away money in a tax-free shares ISA has seen the value of the investment drop by 12%.
Figures complied for the BBC today show the impact of gyrating share prices on savers who have hitched their wagon to shares.
A 65 year-old who had saved £100,000 in a personal pension pot would use the money to buy a retirement annuity, a guaranteed income for life.
But the pot has dropped in value to £91,840 since the start of the year. So the prospective annuity income has fallen from £6,497 to £5,571, a cut of 14% in 9 months.
More than 400,000 buy annuities each year.
A saver who held £10,000 in a shares ISA is likely to have seen its value slip to £8,777, based on the average value of unit trusts which invest in a basket of shares.
HMRC tells me that 3.4 million investors subcribed for stocks and shares ISAs last year.
The figures come from pension experts, Hargreaves Lansdown, and the savings information group, Moneyfacts.
Monday, 28 March 2011
Is just beating inflation the best strategy?
It always pays to look ahead when you are choosing a home for your money.
I don't know what inflation will be next year and the year after, or even in five years' time. But that's the crucial consideration if you're thinking of putting savings in the new inflation-proof certificates which the Chancellor has directed National Savings to provide.
Understandably, we're all talking about Index-Linked Certificates selling out when National Savings relaunch them. They were withdrawn last summer for the first time in 35 years, after £5bn flowed in in a mere three months.
And those who have them are congratulating themselves on securing a risk-free return of RPI plus 1%, at a time when RPI inflation is 5.5% and even the best cash ISAs rate is 3.3%.
But will they be worth it? In particular, will we reach a stage soon when inflation is LESS than the better savings rates?
In last week's Budget, RPI was forecast to be lower but still high, at 3.6% next year and 3.5% in 2013. The prediction for 2015 is 3.8%. One reason is that interest rates will start rising and that props up the RPI measure.
So far so good for the certificates.
But one pessimistic member of the Bank of England's Monetary Policy Committee, Adam Posen, believes that inflation will be lower than expected next year as austerity takes hold.
The British Chambers of Commerce and IHS Global Insight suggest RPI will be 2.8% next year. Capital Economics says 2.6% and Cambridge Econometrics 2.5%.
These are the lower end of economists' forecasts, which tend to be a bit more. But it makes you think: Index-Linked Certificates might be very safe, but they won't necessarily give the best result over the fixed period of 3 or 5 years.
I don't know what inflation will be next year and the year after, or even in five years' time. But that's the crucial consideration if you're thinking of putting savings in the new inflation-proof certificates which the Chancellor has directed National Savings to provide.
Understandably, we're all talking about Index-Linked Certificates selling out when National Savings relaunch them. They were withdrawn last summer for the first time in 35 years, after £5bn flowed in in a mere three months.
And those who have them are congratulating themselves on securing a risk-free return of RPI plus 1%, at a time when RPI inflation is 5.5% and even the best cash ISAs rate is 3.3%.
But will they be worth it? In particular, will we reach a stage soon when inflation is LESS than the better savings rates?
In last week's Budget, RPI was forecast to be lower but still high, at 3.6% next year and 3.5% in 2013. The prediction for 2015 is 3.8%. One reason is that interest rates will start rising and that props up the RPI measure.
So far so good for the certificates.
But one pessimistic member of the Bank of England's Monetary Policy Committee, Adam Posen, believes that inflation will be lower than expected next year as austerity takes hold.
The British Chambers of Commerce and IHS Global Insight suggest RPI will be 2.8% next year. Capital Economics says 2.6% and Cambridge Econometrics 2.5%.
These are the lower end of economists' forecasts, which tend to be a bit more. But it makes you think: Index-Linked Certificates might be very safe, but they won't necessarily give the best result over the fixed period of 3 or 5 years.
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