Cash ISA currency hedge?
Discussion
Supposing you had a good chunk in a cash ISA, and didn’t want to deploy that into the markets, is there a cost effective way to protect that cash from a currency devaluation?
I earn in GBP, mortgage and bills in GBP, got no need for savings to be there too but they’re in an ISA so a bit limited on options from what I can tell. Any ideas?
Coutts do a multi currency offset mortgage which would be splendid…. but I’m far too poor for them. Is there anything similar out there or a DIY bodge job?
I earn in GBP, mortgage and bills in GBP, got no need for savings to be there too but they’re in an ISA so a bit limited on options from what I can tell. Any ideas?
Coutts do a multi currency offset mortgage which would be splendid…. but I’m far too poor for them. Is there anything similar out there or a DIY bodge job?
Not really. My earnings pay the debt off. The savings don t need to.
If you thought GBP would do worse against a basket of world currencies (over a 20year time frame .which I do) then wouldn t it make sense to avoid it if you can?
Edited to add that I’d like to have options open to move abroad in the future.
If you thought GBP would do worse against a basket of world currencies (over a 20year time frame .which I do) then wouldn t it make sense to avoid it if you can?
Edited to add that I’d like to have options open to move abroad in the future.
"
Supposing you had a good chunk in a cash ISA, and didn’t want to deploy that into the markets, is there a cost effective way to protect that cash from a currency devaluation?"
Global equities is the answer. and thats not meant to sound facetious.
Cash rarely (never?) keeps its purchasing power over the long term. Those of a cynical persuasion may argue thats the way the govt keeps it to devalue the national debt.
IMO
Supposing you had a good chunk in a cash ISA, and didn’t want to deploy that into the markets, is there a cost effective way to protect that cash from a currency devaluation?"
Global equities is the answer. and thats not meant to sound facetious.
Cash rarely (never?) keeps its purchasing power over the long term. Those of a cynical persuasion may argue thats the way the govt keeps it to devalue the national debt.
IMO
If you really want to do this you could transfer into a S&S ISA and buy foreign currency money market/very short duration bond funds...e.g. from a quick search XEON for EUR, IB01 for USD.
But I don't really get the rationale. If it's money you might need to spend (in GBP) in the foreseeable future then GBP is what you want, otherwise if it's just sitting there indefinitely then doesn't make much sense to be in cash anyway regardless of currency. If you just want to take a punt on GBP vs other currencies over the next 20yrs that is very much "deploying it into markets".
But I don't really get the rationale. If it's money you might need to spend (in GBP) in the foreseeable future then GBP is what you want, otherwise if it's just sitting there indefinitely then doesn't make much sense to be in cash anyway regardless of currency. If you just want to take a punt on GBP vs other currencies over the next 20yrs that is very much "deploying it into markets".
Timer said:
Not really. My earnings pay the debt off. The savings don t need to.
If you thought GBP would do worse against a basket of world currencies (over a 20year time frame .which I do) then wouldn t it make sense to avoid it if you can?
Edited to add that I d like to have options open to move abroad in the future.
You need to give more information. What currency are your wages in and what currencies are your expenses in?If you thought GBP would do worse against a basket of world currencies (over a 20year time frame .which I do) then wouldn t it make sense to avoid it if you can?
Edited to add that I d like to have options open to move abroad in the future.
If all GBP then your current currency exposure is zero and there’s nothing to hedge,
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