Cash "aggregation" saving platforms?

[bitchstewie]

I was looking at savings rates as I have a reasonable chunk of cash doing sod all.

It seems it would be nice to have a "cash ladder" with amounts on different terms that may get a better overall return.

However I don't really want to be managing several accounts.

I'm with HL for my investments and noticed they have their Active Savings product.

Doing a little homework there appear to be platforms such as Octopus and Raisin too.

Has anyone any feedback or experience of these?

Are they worth it over what may turn out to be £100 over the course of a year given the utterly pitiful rates we have if you don't lock away for several years?

[DonkeyApple]

It’s a bit hard to tell. The business model is to basically move the users’ money to whichever tinpot, screwed entity with a banking license is most desperate to get cash in the front door that month (obviously hyperbolic but the best rates are typically offered by the worst banks as a rule).

Looking at someone like Octopus, it appears to me that the real benefit of the product is it’s automated means of making use of the FSCS protection rather than offering any kind of enhanced return etc?

[bad company]

How about this:-

https://www.marcus.co.uk/uk/en?prd=os&chl=ps&a...

[Helicopter123]

Flagstone is the market leader.

Minimum is £250k.

Choice of USD/EUR/GBP

30 + banks all FSCS guaranteed up to £85k.

Normally £500 to open an account but being waived if you go via a SJP Partner until 31st August.

Range of instant access, term, and notice accounts.

Ongoing Fee is 0.25%

No other charges.

There is a £50k - £250k version, but no instant access, GBP only and only personal monies (no Corporate accounts).

It's a sensational cash product, that we use both personally in the business and with our own clients and those of several accountants.

[bitchstewie]

Thanks all, depressing how little is being paid on cash and almost re-enforces my thinking about deploying more into some low volatility/risk funds and keeping bare minimum "pure cash" on the sidelines.

That one's psychological though

I see DA's point that Octopus appears more about a "single pane of glass" whilst dealing with FSCS maximums which I'm just about below.

So far as I'm aware so long as I'm below £2K/year of dividend income the only thing I need to think about is CGT.

[Mr Pointy]

bhstewie said:

Thanks all, depressing how little is being paid on cash and almost re-enforces my thinking about deploying more into some low volatility/risk funds and keeping bare minimum "pure cash" on the sidelines.

That one's psychological though

I can totally relate to this but please try & get past it & move the money where it can do some good. I'm self employed & at one time had £300k in a Nationwide account which gave me a lovely warm feeling but was sitting there falling in value by at least 2% year. It took some "guidance" to get me to see how much I'd lost out on in the years it was sat there.

bhstewie said:

So far as I'm aware so long as I'm below £2K/year of dividend income the only thing I need to think about is CGT.

If you put it in a GIA account you can still access the capital without charge & every year move up to £12k of gains out without paying CGT. That could go straight into your ISA.

[JulianPH]

Mr Pointy said:

bhstewie said:

Thanks all, depressing how little is being paid on cash and almost re-enforces my thinking about deploying more into some low volatility/risk funds and keeping bare minimum "pure cash" on the sidelines.

That one's psychological though

I can totally relate to this but please try & get past it & move the money where it can do some good. I'm self employed & at one time had £300k in a Nationwide account which gave me a lovely warm feeling but was sitting there falling in value by at least 2% year. It took some "guidance" to get me to see how much I'd lost out on in the years it was sat there.

bhstewie said:

So far as I'm aware so long as I'm below £2K/year of dividend income the only thing I need to think about is CGT.

If you put it in a GIA account you can still access the capital without charge & every year move up to £12k of gains out without paying CGT. That could go straight into your ISA.

These are very good points (no pun intended Mr Pointy! ).

We are seeing an increasing number of clients making a mental separation between their emergency cash fund and longer term cash holdings, which they are moving to low volatility investments.

As an example (as their are plenty of other options out their) our Defensive portfolio is just shy of 20% equities (with the lion's share of that being in high yielding UK large caps) and the balance is split between UK Gilts, UK Index Linked Gilts, UK Fixed Interest and some overseas Fixed Interest with a bit of cash.

It has an average annual return of c. 8.5% over the last 10 years and even over the very difficult 12 months to the end of June managed c. 4%.

These types of investment are starting to replace long term cash holdings (and for some people, they are also replacing a big part of their equity holdings right now).

[bitchstewie]

The "funny" thing about the psychology aspect is that it's not so much about risk it's simply about drilling it into myself that you can actually sell investments if you need to free up some cash.

Sounds dumb I know

I need to understand CGT a bit better so as to be clear what can and can't be done to avoid inadvertently breaking the rules.

At a basic level am I right in thinking that in an unwrapped account CGT applies to each individual holding rather than to the total balance?

[JulianPH]

bhstewie said:

The "funny" thing about the psychology aspect is that it's not so much about risk it's simply about drilling it into myself that you can actually sell investments if you need to free up some cash.

Sounds dumb I know

I need to understand CGT a bit better so as to be clear what can and can't be done to avoid inadvertently breaking the rules.

At a basic level am I right in thinking that in an unwrapped account CGT applies to each individual holding rather than to the total balance?

Yep, it is virtually instant access (back in your bank account the next working day).

CGT is pretty easy to handle, contact Nik on the IM thread if you would like someone to take you through it and after one phone call (maybe with a top up!) you will have it mastered for life!

PS. Yes, it applies to each holding. This can work in your favour though.

[bitchstewie]

Hmm so let me use a bit of wishful thinking as an extreme example.

General account and I put in:

Fund A £10K
Fund B £10K
Fund C £10K
Fund D £10K

I don't touch them and when I next look the balances are:

Fund A £20K
Fund B £20K
Fund C £20K
Fund D £20K

I decide I need £60K.

As CGT is on each holding not the sum total, I could sell the entirety of any three funds and even though I've taken out £60K CGT wouldn't apply as the individual gain on any one fund is within the limits?

[Mr Pointy]

bhstewie said:

Hmm so let me use a bit of wishful thinking as an extreme example.

General account and I put in:

Fund A £10K
Fund B £10K
Fund C £10K
Fund D £10K

I don't touch them and when I next look the balances are:

Fund A £20K
Fund B £20K
Fund C £20K
Fund D £20K

I decide I need £60K.

As CGT is on each holding not the sum total, I could sell the entirety of any three funds and even though I've taken out £60K CGT wouldn't apply as the individual gain on any one fund is within the limits?

JPH will reply I'm sure but no, you only get £12k personal allowance per year. If you wanted £60k you could take out your original £40k (£10k from each) & then £20k of gains. Of that £12k is tax free so you's pay tax on £8k.

(Fervently hoping I've got that right).

[bitchstewie]

Mr Pointy said:

JPH will reply I'm sure but no, you only get £12k personal allowance per year. If you wanted £60k you could take out your original £40k (£10k from each) & then £20k of gains. Of that £12k is tax free so you's pay tax on £8k.

(Fervently hoping I've got that right).

Ah makes sense so the allowance is total not per gain.

I'm just trying to think of a circumstance where this would even an issue given that sitting in a bank I'm earning jack st.

[Mr Pointy]

bhstewie said:

Mr Pointy said:

JPH will reply I'm sure but no, you only get £12k personal allowance per year. If you wanted £60k you could take out your original £40k (£10k from each) & then £20k of gains. Of that £12k is tax free so you's pay tax on £8k.

(Fervently hoping I've got that right).

Ah makes sense so the allowance is total not per gain.

I'm just trying to think of a circumstance where this would even an issue given that sitting in a bank I'm earning jack st.

It's worse than that: you're loosing 2-3% a year. The issue of course is that you probably need to pick an safe investment so the funds are not at risk, or at least the same level of risk as those you've stuck your SIPP & ISA into.

It didn't click with me until recently that this is what the Fund & Share section of the HL account is for.

[bitchstewie]

Mr Pointy said:

It's worse than that: you're loosing 2-3% a year. The issue of course is that you probably need to pick an safe investment so the funds are not at risk, or at least the same level of risk as those you've stuck your SIPP & ISA into.

It didn't click with me until recently that this is what the Fund & Share section of the HL account is for.

Oddly I'm reasonably comfortable picking the investments.

I should add I don't have a SIPP my pension is through my employer, I get the arguments for SIPPs I simply don't want this money totally out of reach even if there's less there than I put in should I need it quickly.

The challenge is how "low" I'm comfortable letting the direct cash accounts run down to.

Sitting here typing it out and reading it back it's patently ridiculous to be "concerned" that you only have enough cash in the bank to go and buy a Range Rover or god only knows what.

I feel stupid yet it's where I find myself.

[JulianPH]

Mr Pointy said:

bhstewie said:

Hmm so let me use a bit of wishful thinking as an extreme example.

General account and I put in:

Fund A £10K
Fund B £10K
Fund C £10K
Fund D £10K

I don't touch them and when I next look the balances are:

Fund A £20K
Fund B £20K
Fund C £20K
Fund D £20K

I decide I need £60K.

As CGT is on each holding not the sum total, I could sell the entirety of any three funds and even though I've taken out £60K CGT wouldn't apply as the individual gain on any one fund is within the limits?

JPH will reply I'm sure but no, you only get £12k personal allowance per year. If you wanted £60k you could take out your original £40k (£10k from each) & then £20k of gains. Of that £12k is tax free so you's pay tax on £8k.

(Fervently hoping I've got that right).

The force is strong with this one.

[JulianPH]

bhstewie said:

Oddly I'm reasonably comfortable picking the investments.

I should add I don't have a SIPP my pension is through my employer, I get the arguments for SIPPs I simply don't want this money totally out of reach even if there's less there than I put in should I need it quickly.

The challenge is how "low" I'm comfortable letting the direct cash accounts run down to.

Sitting here typing it out and reading it back it's patently ridiculous to be "concerned" that you only have enough cash in the bank to go and buy a Range Rover or god only knows what.

I feel stupid yet it's where I find myself.

If your company pension allows you to select different investments, it is basically a SIPP.

The rules of pensions are the same regardless of the type of scheme (setting aside Final Salary schemes).

Your money is just as out of reach in a company pension as with a personal pension (including a SIPP). There is absolutely no difference whatsoever.

I honestly think you would benefit from a chat with Nik. I don't consider in a million years you would become a client, but he can provide a lot of free assistance to help you map out your own journey.

Your choice!

[bitchstewie]

Julian thanks, very kind offer.

I think I know what needs to be done it's just the psychology angle I mentioned earlier and the point Mr Pointy pointedly made.

One question, how far off are you from having your unwrapped products available?

I keep seeing it mentioned on the IM thread but no mention of when, that I can remember.

[JulianPH]

bhstewie said:

Julian thanks, very kind offer.

I think I know what needs to be done it's just the psychology angle I mentioned earlier and the point Mr Pointy pointedly made.

One question, how far off are you from having your unwrapped products available?

I keep seeing it mentioned on the IM thread but no mention of when, that I can remember.

No problem.

We launch on the 1st of September (6 days time) but it will be another week or two before it is open to everyone.

It used to be the case that wrapping an investment was difficult. Now it is harder to offer it unwrapped!

We will start with IM Index (this is easier to unwrap) and within a few weeks add IM Optimum. All will be live during September (though some will take longer than others).

Psychology plays a massive part in everything, not just finance/investments.

Think of Nik (as it would be Nik for you) as being your financial/investment psychologist. You can hear what he says, take or leave any of it and come to your own conclusions (being far better informed). The choice is yours.

What we don't do is hound or chase you. If fact we have to explain this to people (as they are so used to being followed up). You know where we are and have the mobile number of your Private Client Manager. We believe you will call us as and when you want to speak to us. We don't bother you unless you ask us to remind you of anything).

You seem to have most things in order in any event, so this would just be a sense check chat to make sure you haven't missed anything.

Cheers

[DonkeyApple]

Mr Pointy said:

JPH will reply I'm sure but no, you only get £12k personal allowance per year. If you wanted £60k you could take out your original £40k (£10k from each) & then £20k of gains. Of that £12k is tax free so you's pay tax on £8k.

(Fervently hoping I've got that right).

Plus, over time it’s generally worth paying a bit of commission to crystallise gains every so often to utilise your annual CGT allaownace where prudent to do so so as to prevent a big CGT liability building up unnecessarily.

[Mr Pointy]

bhstewie said:

Julian thanks, very kind offer.

I think I know what needs to be done it's just the psychology angle I mentioned earlier and the point Mr Pointy pointedly made.

One question, how far off are you from having your unwrapped products available?

I keep seeing it mentioned on the IM thread but no mention of when, that I can remember.

One thing you do need to be aware of with a GIA account is being a bit careful about CGT Triggering Events. If you had your money in HL Fund & Share acount & then decided to move it to IM or Vanguard or whoever then you would be liable for the CGT incurred. I'm not sure if you can mitigate this by only moving the capital & not the gain; I'm sure someone will be along to advise. It's just something to be aware of which makes GIA accounts slightly less flexible, but then again you hopefully aren't losing 2-3% a year.

As for the psychology maybe start out by deciding how much emergency instant access money you think you really, really need. Move the rest out & then add any excess funds to the emergency account to increase the comfort level. Review after 6 months & shift out the excess & start again.