We round-up the best savings accounts and Isa accounts on offer in 2020.
If you are a fledgling investor, or were just about to dip your toe in the water, this is undeniably a scary time. As well as the terrible human cost of the coronavirus pandemic, you’ll be reading about various economists’ predictions for the worst global slump since the Great Depression and digesting a swathe of news about turbulent stock markets, furloughed staff, and rising unemployment.
Savers have been dealt three crushing blows, with interest rates falling to just above zero. The bad news began in the early morning of 11 March, when the Bank of England revealed in a surprise announcement that it had cut its base rate by two-thirds to 0.25% from 0.75%.
An increasing number of people rely on their savings to generate extra income, particularly in retirement.
In the past, bank, building society or National Savings accounts would probably have played the key role in their portfolios, but the low interest rates currently on offer mean these accounts generate minimal income.
Savers are set to be disappointed by the cash Isa rates on offer as we approach the end of the tax year. Experts have warned that there is unlikely to be a proper cash Isa season this year, with some big banks instead opting to cut their rates.
Most investors agree that it’s important to occasionally rebalance a portfolio. On the one hand, it minimises risk by reducing exposure to higher-flying holdings bid up by the market. On the other, it is a way to implement a contrarian investment strategy that takes profit at market high points and buys in during market lows. So, with the Isa season approaching, how should investors go about rebalancing?
More than 100 investors in failed London Capital and Finance (LCF) mini-bonds have received payouts from Financial Services Compensation Scheme (FSCS) at an average of £20,000 each.
The FSCS has paid out £2.7 million to 135 LCF customers in relation to 151 failed mini-bonds, it said in a statement.
Payouts were to investors who put money into LCF mini-bonds via a transfer from their stocks and shares Isas. The FSCS has made these payments automatically, without the investors needing to apply for compensation.
It’s sometimes said that investing can be so complicated that the best strategy is to keep it simple. One man who might agree is Lord Lee of Trafford, the Liberal Democrat peer and former Conservative MP. He is also known as the first Isa millionaire, having built a portfolio “brick by brick” in personal equity plans (Peps) and then individual savings accounts (Isas).
Over the past five years, we have been building a shares portfolio to generate £10,000 of annual income. It hasn’t been easy, but except during a blip in 2018, investors have been rewarded with a decent mix of capital growth and income.
The word “uncomplicated” features on an Isa provider’s current online advert. As a beginner investor, this has plenty of appeal. Having attended two beginner events, I felt ready to pick my first “uncomplicated” stocks and shares Isa – but was I?