Isas get their power back
A DECADE ago, the push for savers to use their Isa wrapper before the tax year deadline in early April was at full throttle.
For Money Mail, it became a frazzling time of the year as we battled to bring you news of all of the launches and quirky deals.
Banks would clamber over each other to offer the best tax-free rates, while the advertising blitz went into overdrive — the Isa Isa Baby Halifax advert in 2010 to the tune of rap song Ice Ice Baby by Vanilla Ice is still an earworm (unfortunately) for me.
Santander even had a special golf Isa linked to Rory McIlroy winning the U.S. Open. Seriously!
Banks and building societies would undertake a big push in March to attract last-minute cash before the end of the tax year, and then do the same in April when the new one came around.
That all stopped in the mid-2010s. While rates on non-taxfree accounts plunged, cash Isas fared even worse. That’s because smaller providers, the only ones competing for saver cash through easy-access and fixes, didn’t want to bother with the red tape required to offer Isas.
A few challenger banking bosses I spoke to at the time believed the cash Isa was done for, with only wealthy savers needing the tax-free wrapper.
But this year, cash Isa rates are back with a bang (see our special Isa pullout supplement in today’s paper). They now pay as much as 4.2 pc. At the start of last year, you’d have been lucky to bag 1 pc.
With rates rising, many more savers are likely to face a savings interest tax bill, not just the wealthy ones. The Isa is back, baby. And every saver should put them front and centre of their financial planning — it’s a golden opportunity to squirrel away cash from the taxman. And as your savings (hopefully) grow, you’ll be grateful for that in the future.
IN AN honest and frank pub chat at the weekend with a friend — who is a successful professional — our conversation turned to the tricky world of pensions.
It transpired that she believed the money she was saving in her workplace pension — nudging close to six figures at the age of 36 — would be simply accessible from retirement age. The full amount, tax-free. When I explained that’s not quite how it works, and went on to ask whether her pension was simply all parked in a default fund, she looked agog.
Pensions are so vitally important — but most people have very idea how they work. It’s concerning. An hour’s session before children leave school, along with a short refresher put on by an employer every year, should be mandatory.
Meanwhile, an industry-funded pensions dashboard, which is meant to show people all of their pots under one roof, along with State Pension predictions, has been delayed again.
For me, this pub conversation highlighted that more needs to be done to get workers engaged with their retirement nest egg — the sooner, the better.
LAST month, when I received a phone call from Mum first thing in the morning, I panicked. It was completely out of the ordinary.
‘I’ve got a big problem,’ she said. ‘ There’s something running around in my roof and it has kept me awake all night.’
The way she described it, you’d have been left thinking she’d found an unexploded World War II bomb up there.
But it turns out she was right to be worried. When I poked my head in the loft with a torch, staring back at me was a grey squirrel — Mum’s new house guest, happy as Larry.
The pest control people told us squirrels have become a much bigger problem this year — and, in a nutshell, can cause huge damage. We waited for the squirrel to vacate and a kind neighbour went up a ladder and nailed some wire mesh to block a small hole between the gutter and tiles.
Needless to say, the squirrel returned and frantically attempted to get back in. The mesh had done its job — and stopped a potential damage spree.
Keep an eye out for gaps in your roof, or you could face a bill of thousands of pounds ( see page 29) from rodents looking for lodgings.