Martin Lewis’ advice around cash isa

[normal rules]

I see he has made a bit of a u turn regarding cash isa’s.
Not long ago he was promoting them.
Now he is saying get rid and put money instead into new app based saving accounts like JP Morgan backed Chase. That pay 1.5% with no restrictions about withdrawals etc.

[mugnapper]

I’ve got £130k sloshing around at the moment and can’t find anything to invest in that gives a decent return, other than buying a house and renting it out.
But with inflation destined to go to 7% soon, if not higher, I doubt I’ll be troubling the offshore tax havens anytime soon.

[mugnapper]

The Martin Lewis Moneysaving Expert site, helped me get a £1700 tax rebate for Mrs Mug, following her PPI payment
Before we met, she was useless with money. She got a credit card, ran it up to the max, then the bank would say ‘Get a loan to pay the card off and give yourself some cash to splurge’. So she did. Dozens of times.
And every time they added PPI.
She’d been doing this since she started work in 1980!,
I think the PPI assessment only went back 7 years and she got nearly £15k. Imagine how much they’d taken since 1980!!

[big fat yorkshire pudding]

I’ve got £130k sloshing around at the moment and can’t find anything to invest in that gives a decent return, other than buying a house and renting it out.
But with inflation destined to go to 7% soon, if not higher, I doubt I’ll be troubling the offshore tax havens anytime soon.

Loads of options on the stock markets, depends how much risk appetite you have plus your age, loads of options.

Cash ISAs are a good idea if you have loads of money and want to make a small risk free amount. If you need to use an ISA to avoid the tax you probably are more likely to take a bit of risk.

[River Don]

I’ve got £130k sloshing around at the moment and can’t find anything to invest in that gives a decent return, other than buying a house and renting it out.
But with inflation destined to go to 7% soon, if not higher, I doubt I’ll be troubling the offshore tax havens anytime soon.

Loads of options on the stock markets, depends how much risk appetite you have plus your age, loads of options.

Cash ISAs are a good idea if you have loads of money and want to make a small risk free amount. If you need to use an ISA to avoid the tax you probably are more likely to take a bit of risk.

Still, property looks the best bet I think.

[SydneyRover]

This occurred last month in Oz ............

''Unlicensed Instagram and TikTok influencers offering financial advice could face jail time, Asic warns''

https://www.theguardian.com/australia-news/2022/mar/21/unlicensed-instagram-and-tiktok-influencers-offering-financial-advice-could-face-jail-time-asic-warns

[SydneyRover]

On the subject of finance 1 in 25 homes in Oz will be too expensive to insure by 2030 due to the effects of climate change.

[River Don]

The thing is, even if the housing market falls, which is a rare thing, if you own outright then the value remains relative and you still have a rental income. There are risks with housing of course, we've just missed falling for a property that needed at least £35,000 of work doing to it!

With a recession looming though, I think I'd steer clear of stock markets.

None of which is serious financial advice. Escalators can go down as well as up and so on.

[Glyn_Wigley]

I see he has made a bit of a u turn regarding cash isa’s.
Not long ago he was promoting them.
Now he is saying get rid and put money instead into new app based saving accounts like JP Morgan backed Chase. That pay 1.5% with no restrictions about withdrawals etc.

Well of course his advice has changed if something better has become available. You even say yourself it's 'new'! What did you expect, him to ignore the new option and stick to his previous advice just to look consistent?

[SydneyRover]

The advice is always the same RD don't gamble if you can't afford to lose and spread your investments, not sure what more you can do.

[normal rules]

I’m not complaining.
I listen to his advice a lot.
Times are a changing in the money market. That’s all I was flagging up.
I now have a Chase savings account,

[mugnapper]

I've got £50k of Premium Bonds and usually win at least £25 a month and last November won 9× £25 prizes.
Never won more than a £25 prize.though.
Anyone ever won a more substantial prize?

[mugnapper]

Hang on, this post has over a dozen contributions and hasn't descended into name calling.
What's wrong with you lot??;
Post Bank Holiday blues lol??

[big fat yorkshire pudding]

I've got £50k of Premium Bonds and usually win at least £25 a month and last November won 9× £25 prizes.
Never won more than a £25 prize.though.
Anyone ever won a more substantial prize?

Got bought £100 worth when I was younger.  Never touched it but won a couple of 50s and few 25s.  £175 up in total over 16 years so it's not too bad. Luck of the draw mind.  The yield on them on average isn't amazing but if your luck is in...

The best way to make longer term money is probably increasing pension contributions, depends how long you want it away for etc etc. There's some pretty low risk bonds etc you could use too, worth researching.

[BobG]

I've got £50k of Premium Bonds and usually win at least £25 a month and last November won 9× £25 prizes.
Never won more than a £25 prize.though.
Anyone ever won a more substantial prize?

What do you eat for breakfast Mugnapper?!

I've got £50K of Premium Bonds too. I've only ever won 25 quid prizes and my best month ever was only three of the damn things! Last FY I won £375 in total. 0.75% return. Tax free though. Lol

This year, pre May's draw of course, I've won one solitary 25 quid. I'll let you know tomorrow when I get the million....

BobG

[River Don]

My aunty used to be keen on the premium bonds but she would not hold old numbers. She used to cash them in after two or three years and buy some new ones. She seemed to win quite regularly.

Mind you this was years ago, I think they've reduced the number of prizes they pay out now.

[BobG]

The problem with buying  BTL property now is stamp duty. It's very, very expensive. Buying small, cheap properties that rent for around 400-500 quid a month is the avenue my long time business partner and I are following nowadays. But your upper limit for purchase cost is £125K if you want to qualify for zero stamp duty.  But even then, if your total BTL turnover is anything worth having, the tax regime is punishing. Think hard before you go into BTL,

BobG

[BobG]

You're right on both counts RD. The Premium Bond prize fund fluctuates with interest rates - though at the discretion of the Government of course. - and my various aged relatives always used to want new Premium Bonds rather than older ones because they were 'less likely' to win! Statistically stupid I'm sure, but that was the percieved wisdom.

BobG

[Filo]

I put £50k in a stocks and shares ISA in 2014, today that £50k is £80k

[danumdon]

My advice to anyone with cash burning a hole in their pocket, spend it, get some value from it now before inflation just eats it away.

Paying off or reducing down the size of your mortgage would come into play now for people whose deals may be about to end, your next one will be nowhere near as good.

A current cash ISA would be a wonderful place to see your savings shrink faster than a fat bloke's todger in a pair of budgie smugglers.

As for Premium Bonds, there's absolutely nothing premium about them these days, save for the extreme possibility of winning big (statistically next to no chance) you would need to win very many of the 25quid prizes to even start to cover the horrendous inflation of your bonds that you hold.

[BobG]

Yup. Fair point that Danum. I'm seriously thinking, seriously, of buying a place in Colombia. It'd be a way better investment than Premium Bonds. I can commute. A visitor visa, easily obtained when you land in Bogota, is valid for 3 months and you can have two a year. I qualify for better visas too. So, I'm really wondering now. I fancy watching my togger in the Atanasio Girardot Stadium in the staggeringly impressive city of Medellin. Which team shall I suppoort though? Atlético Nacional or Independiente Medellín? They both play there.

Having said all that, no doubt I'll now find something to stop me... Mind you, a lot of Yanks retire to Medelllin so if they can do it, I can't see any reason why I couldn't do it.

BobG

[River Don]

Has anyone tried P2P lending?

I quite the idea of helping to fund a local business but I've never taken the plunge with it.

[BillyStubbsTears]

I sense we are at the start of a long period of Financial Repression. Inflation being higher than saving interest. It's the natural way to minimise the effect of large national debts. But it does also mean that savings in "safe" investments will get squashed.

It's what happened in the 1940s-1970s to bear down on the debt incurred fighting WWII. And although squashing savings does seem unfair (to the savers) it ultimately leads to a much less starkly divided society in economic terms.

[mugnapper]

Re Premium Bonds, 2 x £25 wins this month. Won't be booking a holiday just yet lol

[idler]

I win most months as does the wife.
I won £25 and she won £100. Last month it was the other way round.
We do both have the maximum but the money is easily accessible for if/when we decide we need a bungalow.

[River Don]

Premium bonds aren't that accessible Idler, particularly if you've had them a longtime. When my Dad discovered he had terminal cancer, he decided to cash his in rather than let my Mum deal with them. I remember it wasn't straight forward.

[BobG]

I won two 25 quids this month. No holiday for me either.

BobG

PS. I've just noticed. The VERY SAME premium bond has won 25 quid in both April and May. How bizarre is that? Dutch! If I have 50,000 of the things what's the odds on the exact same one being drawn out in consecutive months? I suspect that is an impossible  calculation given that we don't know the total number of prizes awarded (and hence the number of 'individual draws'). But whatever the algorythm, it's an ultra unlikely coincidence.

BobG

[colfromdonny]

I got a cheque last month for £25 which was for my mother who died 20 years ago.  We didn't know that she had any premium bonds as we thought my dad had sorted all of her affairs out. It appears that they only go into the draw for a year after a death then its stake back only.  Turns out she had 11 quids worth!! So glad she didn't win the big one

[BillyStubbsTears]

Bob.

The return on PBs is 1%. So in any given month, if you have 50,000 £1 PBs, you should expect to receive £41.67.

If they ONLY gave out £25 wins every month, that means that you've expect 1.67 of your 50,000 to win each month. In other words, each bond has a 0.003333% chance of winning each month.

So, if you have ONE winner in a given month, the chances of the same one winning next month are 0.003333%. Or 30,000/1 against. In reality, the odds would be a bit worse than this because not all the wins are £25. A few are bigger, so there are fewer winning tickets each month. 30,000/1 is the shortest the odds could be.

If you had two winners in a given month, the odds against EITHER of them winning the next month are 15,000/1 by the simple calc above. 10,000/1 if you have three winners etc, etc.

[Colemans Left Hook]

The advice is always the same RD don't gamble if you can't afford to lose and spread your investments, not sure what more you can do.

I think you are teaching your grannies to suck eggs here 


I have just realised you are the same Sid who we were hunting during the british gas privatisation and claim my £5 ( i didnt realise you had nicked a hovis loaf and been deported like so many used to be)

If i played the speculative currency game (due to the spreads i won't and i also dont need to) i would like to be in the currency of the first country in the world to introduce plastic money.  Someone paid me in the plastic notes and i kept them for a few years and was amazed how much more the Australian dollars were worth after
about 4 years, checking Australia introduced plastic money in 1988 followed by NZ & Singapore


Admittably i seem to remember the A$ dollar was rubbish before then