Who Wants to be a ISA Millionaire
Discussion
Quite an interesting and eye opening read http://www.moneyobserver.com/our-analysis/beginner...
I've got a wee bit in my 'pot' at the mo - absolutely nowhere near a £mil - but kicking myself now for not starting sooner. I could easily of put more in but it just didn't seem sexy at the time. My advice to anyone with spare cash is get stuck in!
I've got a wee bit in my 'pot' at the mo - absolutely nowhere near a £mil - but kicking myself now for not starting sooner. I could easily of put more in but it just didn't seem sexy at the time. My advice to anyone with spare cash is get stuck in!
Spidersleg said:
xeny said:
At a guess, shares rather than a cash ISA.
Guilty of not reading the full article. After reading more, yes you're right.Interesting about IHT - I didn't know that
HootersGsy said:
DoubleSix said:
Fwiw
ISAs form part of the deceased’s estate and are subject to IHT.
True, but if your estate is large enough that you're worried about IHT there are things you can do to minimise it.ISAs form part of the deceased’s estate and are subject to IHT.
But ISAs do not dovetail with estate planning (trusts, gifting etc). By definition they are belonging to the individual.
Phooey said:
Interesting about IHT - I didn't know that
Hi mate, another interesting point is that SIPPs are not subject to IHT. Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
DoubleSix said:
Correct.
But ISAs do not dovetail with estate planning (trusts, gifting etc). By definition they are belonging to the individual.
All getting a bit theoretical but it's easy enough to work around, put other assets into trust to bring the taxable estate down to a manageable level - if you've got close to a million in cash ISAs the chances are you'd have other, more significant assets! Or move out of the UK to a country with no inheritance taxes (and live for long enough to break UK ties), at which point the ISAs become pointless but the IHT savings could be sufficient to justify. Anyway, not a problem that 99% of posters will have or have the means to do anything about!But ISAs do not dovetail with estate planning (trusts, gifting etc). By definition they are belonging to the individual.
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
HootersGsy said:
You could do the same with a cash ISA, it just takes longer! Something to leave for the children / grandchildren to complete for you
I don't feel that we were put on this earth(see note 1.) to save money for our children, or grandchildren.Because, logically, those children and grandchildren will have to save that money - and add to it - to pass on to their children and grandchildren and so it will go on and on. Nobody will ever spend the money, it will simply be passed on to our successors. What is the point in that?
Note 1. I don't know why we were put on this earth - do you have any idea?
The Mad Monk said:
I don't feel that we were put on this earth(see note 1.) to save money for our children, or grandchildren.
Because, logically, those children and grandchildren will have to save that money - and add to it - to pass on to their children and grandchildren and so it will go on and on. Nobody will ever spend the money, it will simply be passed on to our successors. What is the point in that?
Note 1. I don't know why we were put on this earth - do you have any idea?
I think the idea is that each generation contributes and grows the family wealth whilst also enjoying the benefits.Because, logically, those children and grandchildren will have to save that money - and add to it - to pass on to their children and grandchildren and so it will go on and on. Nobody will ever spend the money, it will simply be passed on to our successors. What is the point in that?
Note 1. I don't know why we were put on this earth - do you have any idea?
The point being it’s bloody hard to do that if you start with FA.
HootersGsy said:
You could do the same with a cash ISA
No you can't. Not with interest rates less than inflation, as they currently are (and probably will be for some time to come). Putting money into a cash ISA is not currently a way to make yourself rich in real terms, even over the ultra-long term.Okay, numerically you could make yourself a "millionaire", but by the time you get there your million will be worth the square-root of fk-all.
DoubleSix said:
JulianPH said:
Hi mate, another interesting point is that SIPPs are not subject to IHT.
Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Mostly correct, however the tax treatment of a SIPP is not “exactly the same” as an ISA.Given you can have as many SIPPs as you like (but can only receive tax relief within the contribution limits) then you could take out a SIPP in your own name for each child/grandchild - naming the relevant one as the death beneficiary for each scheme.
Alternatively you could do this with just one SIPP and provide a more detailed death benefit nomination naming each beneficiary with the percentage of the fund they are to receive.
This way you get exactly the same tax treatment as with an ISA, but full tax relief going in and no IHT when they take the money out.
Remember this all counts towards your own lifetime allowance though.
Another beauty of this is everything is in your name should circumstances change and you need to take money from it for yourself.
Edited by DoubleSix on Sunday 20th May 09:34
Dr Mike Oxgreen said:
No you can't. Not with interest rates less than inflation, as they currently are (and probably will be for some time to come). Putting money into a cash ISA is not currently a way to make yourself rich in real terms, even over the ultra-long term.
Okay, numerically you could make yourself a "millionaire", but by the time you get there your million will be worth the square-root of fk-all.
Absolutely, but the same thing applies to the article - it took 22 years at 7% in their example to get to a million. Inflation over that period is going to take a fair dent out of that. My own retirement planning and inflation assumptions mean the capital at retirement is worth about half of its face value in today's money - getting good returns is absolutely essential if you want a comfortable retirement.Okay, numerically you could make yourself a "millionaire", but by the time you get there your million will be worth the square-root of fk-all.
HootersGsy said:
Dr Mike Oxgreen said:
No you can't. Not with interest rates less than inflation, as they currently are (and probably will be for some time to come). Putting money into a cash ISA is not currently a way to make yourself rich in real terms, even over the ultra-long term.
Okay, numerically you could make yourself a "millionaire", but by the time you get there your million will be worth the square-root of fk-all.
Absolutely, but the same thing applies to the article - it took 22 years at 7% in their example to get to a million. Inflation over that period is going to take a fair dent out of that. My own retirement planning and inflation assumptions mean the capital at retirement is worth about half of its face value in today's money - getting good returns is absolutely essential if you want a comfortable retirement.Okay, numerically you could make yourself a "millionaire", but by the time you get there your million will be worth the square-root of fk-all.
https://www.investopedia.com/ask/answers/what-is-t...
An investment returning 7% per annum will take 10 years to double its value.
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