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Post by batchoy on Feb 17, 2015 8:29:40 GMT
Logged onto Wellesley this morning to check my account and promptly fell off the sofa - www.wellesley.co.uk/isa/ It would seem that Wellesley have found a way of getting ahead of the rest of the pack, but their model has always been the one that I have viewed as being the easiest to convert to an ISA. I think a lot of reading is in order. |
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oldgrumpy
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Post by oldgrumpy on Feb 17, 2015 8:57:32 GMT
I notice the tax free 5 year Wellesley Bond conveniently (for them) pays only 5.25%, but if you buy their normal five year bond they can afford to pay you 7% (5.6% after my 20% tax). I used to be annoyed by Buildings Societies etc who operated in that way. I lose value by choosing an ISA.  |
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Post by batchoy on Feb 17, 2015 9:13:29 GMT
I notice the tax free 5 year Wellesley Bond conveniently (for them) pays only 5.25%, but if you buy their normal five year bond they can afford to pay you 7% (5.6% after my 20% tax). I used to be annoyed by Buildings Societies etc who operated in that way. I lose value by choosing an ISA. But there is a difference in the risk between the two with the regular Bond you are investing in Wellesley themselves not P2P, whereas the ISA Bond is investing in the P2P loans. The comparable products are their 3 year P2P investment which pays 4.25% (3.4% after 20% tax, 2.55% after 40% tax) and their 5 year P2P investment which pays 6% (4.8% after 20%, 3.6% after 40% tax) which makes 4% and 5.25% tax free look more agreeable.
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oldgrumpy
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Post by oldgrumpy on Feb 17, 2015 9:16:44 GMT
batchoy Ah! Thank you. (I'm still only on my first cup of tea - no bananas yet :  Following your own edit: I would still feel hard done by with 5.25% ISA when non ISA is 6%. It feels like the provider is effectively pocketing much of your tax relief.
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bugs4me
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Post by bugs4me on Feb 17, 2015 10:20:31 GMT
batchoy Ah! Thank you. (I'm still only on my first cup of tea - no bananas yet : Following your own edit: I would still feel hard done by with 5.25% ISA when non ISA is 6%. It feels like the provider is effectively pocketing much of your tax relief. Maybe Wellesley are different but ISA's have got themselves a shocking reputation especially as the banks/bs have latched onto the tax free element and then proceeded to screw savers on returns. In many cases it's better to forget the pathetic low ISA return and simply pay the tax on normal savings/investment plans.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Feb 17, 2015 10:43:04 GMT
batchoy Ah! Thank you. (I'm still only on my first cup of tea - no bananas yet : Following your own edit: I would still feel hard done by with 5.25% ISA when non ISA is 6%. It feels like the provider is effectively pocketing much of your tax relief. You'd expect them to charge something for providing the ISA wrapper and associated overheads. Is 0.75% a fair charge?
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Post by davee39 on Feb 17, 2015 11:10:34 GMT
The 5 year 'normal' account pays 5.25% Monthly interest. The 6% is highly misleading because the interest is not compounded (you do not earn interest on interest). Instead you get the interest paid at the end. The bond is supposed to be a
trade-able instrument which can be held in an ISA, the question, then, is will it have a liquid market or is it just a bit of clever financial engineering.
I am still unsure about Wellesley. The rate is subject to property risk and is not hugely generous. I had planned to sell out but find myself over invested in Ratesetter so I am in need of some diversification.
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bugs4me
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Post by bugs4me on Feb 17, 2015 11:26:41 GMT
<snip> I am still unsure about Wellesley. The rate is subject to property risk and is not hugely generous. I had planned to sell out but find myself over invested in Ratesetter so I am in need of some diversification. The Wellesley rate was initially market leading - since then IIRC the returns have dropped twice. No doubt their TV advertising campaign has been successful. Fortunately I got involved early when their 3 year return was at 6.5% but I certainly wouldn't be renewing these at the rates now currently on offer.
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Post by batchoy on Feb 17, 2015 12:49:57 GMT
batchoy Ah! Thank you. (I'm still only on my first cup of tea - no bananas yet : Following your own edit: I would still feel hard done by with 5.25% ISA when non ISA is 6%. It feels like the provider is effectively pocketing much of your tax relief. You'd expect them to charge something for providing the ISA wrapper and associated overheads. Is 0.75% a fair charge? An 0.75% wrapper fee seems a bit on the high side, typical fees for self select ISAs appear to be between 0.2% to 0.4% though there are some that go as high as 0.75%. However with Self Select ISAs you then you have the issue that the lowest fees might come with the highest dealing fees and vice versa which depending on how you operate your Self Select ISA might mean that 0.75% overall is not that bad a fee for Wellesley's Offering.
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Post by davee39 on Feb 17, 2015 13:02:55 GMT
There is no 0.75% fee. The 5 year P2P investment pays only 5.25% (the 6% quoted is creative accounting).
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Greenwood2
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Post by Greenwood2 on Feb 17, 2015 13:16:20 GMT
There is no 0.75% fee. The 5 year P2P investment pays only 5.25% (the 6% quoted is creative accounting). I thpught there was an annual charge, but had trouble finding the details.
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Post by batchoy on Feb 17, 2015 13:50:04 GMT
There is no 0.75% fee. The 5 year P2P investment pays only 5.25% (the 6% quoted is creative accounting). There are two 5 year accounts one which pays 5.25% monthly and one which pays 6% at term.
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Post by mrclondon on Feb 17, 2015 14:09:42 GMT
There is no 0.75% fee. The 5 year P2P investment pays only 5.25% (the 6% quoted is creative accounting). There are two 5 year accounts one which pays 5.25% monthly and one which pays 6% at term. Both of which are equivalent to 5.39% AER.
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Post by batchoy on Feb 17, 2015 16:23:11 GMT
So going through to the the application process EPM are not making charges for managing the the P2P ISA Bond unless:
If any of the above do occur then the charges look quite steep.
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bob2014
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Post by bob2014 on Feb 17, 2015 16:56:50 GMT
Wellesley are not doing transfers from their existing p2p into the ISA. Which means I would have to use the Early Redemption Scheme, however for me the fees would wipe out the first years tax savings. I'm also guessing that the fees cannot be used to reduce my tax due on interest. Hope they do it again next year, when I can plan things a bit better.
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