Will you unwrap your ISA's?

A question about : Will you unwrap your ISA's?

Current interest rates for ISA's are abysmal!

Myself and my wife have built up some tidy sums over the years and are both basic rate taxpayers. We can earn at least 3% on various current accounts 123/Lloyds/TSB etc which nets down to 2.4%.
Current ISA rates are less than 2% with 5 year fixes struggling to get to 2.4% for transfers in.

With interest rates forecast to go up within that period it seems better to me to unwrap my tax protection, which is currently negative, and start again some time in the future?

What are peoples thoughts?

Best answers:

• My thoughts take me away from cash (although some is obviously essential).
  Are your pensions well funded? There can be large tax breaks here as high as 40% even for basic rate tax payers (when you include NI savings).
  Have you thought about investing in equities for higher gains?
  Apart from an accessible fund for emergencies then is there a particular reason you need to be in cash?
• As our fixed term ISAs end, we have been transferring them to stocks and shares ISAs. OH has one cash ISA left which matures in April 2016, but this is paying 5% (oh those were the days).
• Anything that I plan to spend in the next 5 or so years is in cash in current accounts and regular savers, and some also in Premium Bonds for a bit of fun. Everything longer than that is in S&S, mainly ISA, or in my SIPP.
• Generally I think the answers are
  Minimise how much you hold in cash as much as you can.
  Don't worry too much about unwinding cash ISA's. With a Ј30K joint allowance per year it's unlikely to be a big issue because you'll have plenty of allowance in future. If you have > Ј30K per annum spare then it's certainly worth reviewing your pension provision - very few people have enough.
• my ISA is long gone. All in current accounts earning up to 5 %.
• I have no cash ISAs and haven't for over 10 years.
  All in S&S ISAs and doing fantastically. For long term money I really can't see the point in keeping cash.
• I transferred my cash ISA into a S&S ISA when my 5% fixed rate came to an end last year. My cash savings are in current accounts now earning 4-5% (other than some index linked savings certs).
• Probably not on the basis that interest rates wont remain abysmal for ever. We have significant accumulated ISA's that we will roll over. For a few years now we have also put 50/50 into stocks and shares, in one year we put 100% of our allowance into stocks and shares.
  For this year I am unsure. I think stocks may be overpriced at the moment and we may be due for a market correction. So I may just wait and and set up a monthly dd to buy stocks and shares later in the year. Or alternatively just buy shares through my ISA like I did with Tesco and TSB. Another consideration is to increase my pension contributions.
• S&S isn't for everyone. I'm not adding risk to my future property deposit money, even for an extra % or two. After I have a mortgage things will be different.
  Cash ISAs are a waste of time currently though. I have the Nationwide 2.59% regular saver, which just about beats Santander 123 after tax, but that ends soon and afterwards I doubt I'll have anything in an ISA. Although I will have filled up all of my interest-paying current accounts so I guess I need somewhere to put it, even if it is a pitiful cash ISA.
• My S & S Isa has performed very well over the 7 years I have had it I have some cash in an interest paying current account too..
• Cash if fine for those who are risk averse. With careful management you can get a return of around 3% pa at the moment . Its not a long term strategy but when you move into your 50's is becomes more attractive. I have 43% in cash and 57% in stocks and shares ISA's/Pensions.