Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast - Video - 28th Mar 20
The Great Coronavirus Depression - Things Are Going to Change. Here’s What We Should Do - 28th Mar 20
One of the Biggest Stock Market Short Covering Rallies in History May Be Imminent - 28th Mar 20
The Fed, the Coronavirus and Investing - 28th Mar 20
Women’s Fashion Trends in the UK this 2020 - 28th Mar 20
The Last Minsky Financial Snowflake Has Fallen – What Now? - 28th Mar 20
UK Coronavirus Infections and Deaths Projections Trend Forecast Into End April 2020 - 28th Mar 20
DJIA Coronavirus Stock Market Technical Trend Analysis - 27th Mar 20
US and UK Case Fatality Rate Forecast for End April 2020 - 27th Mar 20
US Stock Market Upswing Meets Employment Data - 27th Mar 20
Will the Fed Going Nuclear Help the Economy and Gold? - 27th Mar 20
What you need to know about the impact of inflation - 27th Mar 20
CoronaVirus Herd Immunity, Flattening the Curve and Case Fatality Rate Analysis - 27th Mar 20
NHS Hospitals Before Coronavirus Tsunami Hits (Sheffield), STAY INDOORS FINAL WARNING! - 27th Mar 20
CoronaVirus Curve, Stock Market Crash, and Mortgage Massacre - 27th Mar 20
Finding an Expert Car Accident Lawyer - 27th Mar 20
We Are Facing a Depression, Not a Recession - 26th Mar 20
US Housing Real Estate Market Concern - 26th Mar 20
Covid-19 Pandemic Affecting Bitcoin - 26th Mar 20
Italy Coronavirus Case Fataility Rate and Infections Trend Analysis - 26th Mar 20
Why Is Online Gambling Becoming More Popular? - 26th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock Markets CRASH! - 26th Mar 20
CoronaVirus Herd Immunity and Flattening the Curve - 25th Mar 20
Coronavirus Lesson #1 for Investors: Beware Predictions of Stock Market Bottoms - 25th Mar 20
CoronaVirus Stock Market Trend Implications - 25th Mar 20
Pandemonium in Precious Metals Market as Fear Gives Way to Command Economy - 25th Mar 20
Pandemics and Gold - 25th Mar 20
UK Coronavirus Hotspots - Cities with Highest Risks of Getting Infected - 25th Mar 20
WARNING US Coronavirus Infections and Deaths Going Ballistic! - 24th Mar 20
Coronavirus Crisis - Weeks Where Decades Happen - 24th Mar 20
Industry Trends: Online Casinos & Online Slots Game Market Analysis - 24th Mar 20
Five Amazingly High-Tech Products Just on the Market that You Should Check Out - 24th Mar 20
UK Coronavirus WARNING - Infections Trend Trajectory Worse than Italy - 24th Mar 20
Rick Rule: 'A Different Phrase for Stocks Bear Market Is Sale' - 24th Mar 20
Stock Market Minor Cycle Bounce - 24th Mar 20
Gold’s century - While stocks dominated headlines, gold quietly performed - 24th Mar 20
Big Tech Is Now On The Offensive Against The Coronavirus - 24th Mar 20
Socialism at Its Finest after Fed’s Bazooka Fails - 24th Mar 20
Dark Pools of Capital Profiting from Coronavirus Stock and Financial Markets CRASH! - 23rd Mar 20
Will Trump’s Free Cash Help the Economy and Gold Market? - 23rd Mar 20
Coronavirus Clarifies Priorities - 23rd Mar 20
Could the Coronavirus Cause the Next ‘Arab Spring’? - 23rd Mar 20
Concerned About The US Real Estate Market? Us Too! - 23rd Mar 20
Gold Stocks Peak Bleak? - 22nd Mar 20
UK Supermarkets Coronavirus Panic Buying, Empty Tesco Shelves, Stock Piling, Hoarding Preppers - 22nd Mar 20
US Coronavirus Infections and Deaths Going Ballistic as Government Start to Ramp Up Testing - 21st Mar 20
Your Investment Portfolio for the Next Decade—Fix It with the “Anti-Stock” - 21st Mar 20
CORONA HOAX: This Is Almost Completely Contrived and Here’s Proof - 21st Mar 20
Gold-Silver Ratio Tops 100; Silver Headed For Sub-$10 - 21st Mar 20
Coronavirus - Don’t Ask, Don’t Test - 21st Mar 20
Napag and Napag Trading Best Petroleum & Crude Oil Company - 21st Mar 20
UK Coronavirus Infections Trend Trajectory Worse than Italy - Government PANICs! Sterling Crashes! - 20th Mar 20
UK Critical Care Nurse Cries at Empty SuperMarket Shelves, Coronavirus Panic Buying Stockpiling - 20th Mar 20
Coronavirus Is Not an Emergency. It’s a War - 20th Mar 20
Why You Should Invest in the $5 Gold Coin - 20th Mar 20
Four Key Stock Market Questions To This Coronavirus Crisis Everyone is Asking - 20th Mar 20
Gold to Silver Ratio’s Breakout – Like a Hot Knife Through Butter - 20th Mar 20
The Coronavirus Contraction - Only Cooperation Can Defeat Impending Global Crisis - 20th Mar 20
Is This What Peak Market Fear Looks Like? - 20th Mar 20
Alessandro De Dorides - Business Consultant - 20th Mar 20
Why a Second Depression is Possible but Not Likely - 20th Mar 20

Market Oracle FREE Newsletter

Coronavirus-bear-market-2020-analysis

Budget 2014 Cash ISA Allowance Near Tripled to £15,000, Current Best ISA

Personal_Finance / ISA's Mar 19, 2014 - 08:51 PM GMT

By: Nadeem_Walayat

Personal_Finance

The Coalition government has finally acted to correct a huge disparity in the ISA market of savers being forced to split their annual ISA allowances between Cash and Shares ISA's by allowing savers now to use the whole of their annual allowance towards a cash ISA rather than the existing 50/50 split between cash and shares, as investing in shares has never been suitable for the vast majority of savers given that they are a high risk asset class that certainly never deserved a 50/50 portfolio allocation. Even for highly experienced stocks investors such as myself tend to experience sleepless nights when portfolio allocations approach 30% of assets let alone 50%. Therefore for most investors the stock market and floating bonds should never really go above an approx 15% allocation (including pension funds) with the bulk of the rest made up by property and cash (including fixed bonds).


The further icing on the cake for savers is the boost in the cash ISA allowance to £15,000, which compares against the current cash ISA allowance of just £5,760, and total ISA allowance of £11,520 for 2013-14. Furthermore now savers can switch between shares and cash ISA's when in the past the switch was only one way from cash to shares.

The ISA 'improvements' are especially good news for those like myself who see the Cash ISA's in terms of being a very flexible pensions savings that is immune to the pensions industry vultures and their myriad of scams to steal ones pension fund that results in many disappointed retirees who receive a pittance of what they thought they would receive on retirement, at least cash ISA's have always been transparent.

Off course whilst cash ISA's may be bee deemed to be risk free, there is however the risk of a government Cyprus style theft, so whilst Cash ISA's are safe they are not entirely risk free.

The new ISA allowance and rules will be active from July 2014.

Current Best Cash ISA's for Least Stealth Inflation Theft

So whilst Britians' savers continue to face what amounts to a zero interest rate catastrophe as the Bank of England continues to get away with government debt monetization and support of the bankrupt banks (Co-op the current bank teetering on the brink of collapse) via unlimited funding scheme that is now approaching its 2nd full year of the collapse in savings interest rates that began in May 2012 and soon accelerated into sub inflation rates of systemic theft as illustrated by the table below which shows the cash ISA rates offered by apparently the often reported as best buy accounts of the Halifax mega-bank that in reality crashed in response to the Bank of England's Funding for Lending Scheme that started in July 2012, still a cash ISA does allow savers to avoid the double taxation theft i.e. savers are taxed on their earnings and then AGAIN on their interest earned on savings.

Halifax ISA's May 2012 Sept 2012 Nov 2012 Mar 2013 May 2013 July 2013 Mar 2014 % Cut
Instant Access
3%
2.75%
2.35%
1.75%
1.35% 1.35% 1.5% -50%
1 Year Fix
2.25%
2.05%
2.05%
1.75% 1.75% 1.65% -27%
2 Year Fix
4.00%
3.25%
2.25%
2.5%
2.10% 2.10% 2.05% -49%
3 Year Fix
4.25%
3.75%
2.35%
3.00%
2.25% 2.25% 2.25% -47%
4 Year Fix
4.35%
3.80%
2.40%
3.05%
2.30% 2.30% 2.40% -45%
5 Year Fix
4.50%
4.15%
2.60%
3.10%
2.35% 2.35% 2.5% -44%

The table illustrates that despite a minor up tick in rates, the tax payer bailed out Halifax continues to across the board pay abysmally poor rates of interest that are far below the official UK RPI Inflation rate of 2.8%.

Newcastle Building Society 2.9%, 5 Year Fixed Rate Cash ISA

Before you retch at the thoughts of being forced to lock away your hard earned savings for 5 years just to have a chance of beating official inflation. You need to consider the following points of the Newcastle ISA Account that literally get the heart racing for savings obsessive's such as myself.

  • Five year fixed rate of 2.9% per annum.
  • Withdrawals including transfers out are permitted subject to 120 days loss of interest ONLY on the monies withdrawn.
  • Fixed until March 2019
  • Allows deposits and transfers in as long as the issue remains current (open).

The key point is that the account allows withdrawals with the loss of 120 days interest, which changes the nature of the account as it is no longer behaves as a 5 year fixed rate account but instead a very high rate of interest paying instant access account that pays 2.9% with a withdrawal fee of 0.98%, that allows for capital to be transferred out at any point during the next 5 years when interest rates rise!

The following table better illustrates the actual average rate of interest that savers will achieve by the end of each year, that takes into account the 0.957% early withdrawal fee, as compared against similar term fixed rate accounts by the Halifax

Year Newcastle Effective rate Halifax Better off by per year
1
1.97%
1.65%
+0.32%
2
2.42%
2.05%
+0.37%
3
2.58%
2.25%
+0.33%
4
2.66%
2.40%
+0.26%
5
2.9%
2.5%
+0.4%

Therefore the Newcastle Cash ISA both pays a higher rate of interest (after the early exit charge) AND allows transfers out when interest rate actually do rise.

In my opinion this is by far the BEST cash ISA account to appear on the market for at least 18 months due to its flexible nature. Therefore I would not be surprised if high demand results in it soon disappearing from the market place which means it is better to act sooner rather than later.

Summary of ISA Rules & Benefits

  • The ISA accounts are TAX FREE, and do not have to be entered onto any tax returns. The equivalent taxable return on a 3% cash ISA for standard rate tax payers is 3.6%. For higher rate tax payers it is 4.2%.
  • The income from tax ISA's does not count against many mean tested benefits such as Tax Credits.
  • The Allowance for 2013-14 is £11,520, £5,760 for cash and £5,760 for shares ISA's or the whole £11,520 into a shares ISA.
  • You can only open ONE New cash ISA per tax year, and you can add new monies to One Cash ISA per tax year (see transfers). Similarly you can open only one new Shares ISA per tax year.
  • You do not have to open a Cash ISA with your existing provider, i.e. you can open an account at different providers every year.
  • Most providers allow for transfers in. And ALL should allow you to transfer out.
  • Once you withdraw from a Cash ISA you cannot then then re-deposit into. The £5,760 limit refers to total deposited, and not maximum account balance. So if you deposit £5,760, and withdraw £1000, then you cannot re-deposit that £1000 in the same tax year as you have used up your £5,760 deposit limit.
  • To maximize your tax free interest, it is best to open your account at the start of the tax year.
  • The Financial Services Compensation Scheme (FSCS) guarantees the first £85,000 (Euro 100,000) per person, per banking licence . Those with sizable savings that total more than £85,000 should ensure that their institutions really are separate, especially given the banking crisis forced mergers.
  • There is the facility to transfer Cash ISA monies into Shares ISA's but NOT from Shares ISA's to Cash ISA's .
  • Next years Cash ISA allowance (2014-15) as mentioned earlier from July 2014 will be boosted to a massive £15,000, which compares to what it was scheduled to rise to inline with CPI inflation of £5,940. Additionally shares ISA's will be able to be converted into Cash ISA's.

UK House Prices Mega-trend Forecast 2014-2018 Ebook

The UK housing market ebook is due be completed by the end of this month (March 2014) that contains extensive analysis and detailed trend forecasts. The ebook also includes extensive guides on how to buy or sell properties, value increasing home improvements, how to maintain and save money on running costs and more - ALL for FREE.

Ensure you are subscribed to my always free newsletter for my latest analysis and to be able to download the ebook for FREE on release.

However, given the time critical nature of the content excerpted analysis including the detailed trend forecasts were posted online in 2 parts on the 30th of December 2013:

These articles were soon followed up by 2 concise youtube videos:

Source and Comments: http://www.marketoracle.co.uk/Article44887.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, stocks, housing market and interest rates. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules