Savers cash in their ISAs to survive, says Hargreaves Lansdown

Here we go again and the message is the same, it comes from the Bank of England:-

Don't save

Don't teach your children to save

Never save money again

Savers will always be sacrificed.

People are now getting the message.

I suspect that many are cashing in their ISAs because, in the main, they are losing value year by year.

Pensioners savings,intended to support them in old age, without reliance on the state, are being systematically destroyed through QE. This will prove counter productive when state assistance is sought by the QE dispossesed. Surely a system which seeks to support borrowers at the expense of savers could introduce some kind of 65+ savings scheme which would maintain the value of their savings (and dignity).

Certainly holders of cash ISAs are losing value year on year. However my ISA portfolio (mainly equities) has had an average annual compound growth rate of 8.89% over the last ten years, with a total growth of 43.2% over the last three years. I have a wide range of largely main stream funds along with around a dozen direct stock holdings. Although I take care in making buying and selling decisions I am not a particularly sophisticated investor, so I would dispute KRich's assertion that most ISAs are losing value year on year.

Sinic, you've got it sussed. Don't save (cash). Invest instead.

It would be interesting to know whether other ISA providers experienced the same outflow of money or whether HL were hit by many small investors moving ISAs out to avoid the charges on their small tracker investments

@krich - My HL S&S ISAs certainly haven't been losing money year-on-year, and even if they were, I'd be continuing to invest during lows.

HL were guilty of terrible PR and customer care:

You can't spring this on people at such short notice.

You can't leave people scrabbling around to find which of their holdings attract charges and which don't.

Charging per fund, rather than applying a platform charge, pushes people to reduce diversification.

They will also happily charge per fund in your ISA, then again in your SIPP, and same again for you spouse.

I was going to be hit with a charge of £200 pa just for my SIPP, so HL lost my business and my SIPP is now in Vanguard trackers with Bestinvest. Yes, they charge a fee, but it covers my whole SIPP and lets me buy Investment Trusts, equities, and ETFs all within this one charge.

Watch and learn HL!

I use the peer-to-peer lending site, Zopa to keep a proportion of my long-term savings pot. my feelings are that it is getting a better investment as the months go by and that few seem to be cashing in their investment. A lot of people with good credit records seem to be borrowing money.

Hargreaves Landsdown just wishes to charge clients more, te kept their profits up.

Answer, go direct to the product provider.

Well done Sinic and Steve P. Men after my own heart. Take the trouble to manage your own investments and find out how just ordinary folk can make a shed load of money.

I have not been happy with their charges and have been thinking about managing my own investments for some time now. After reading the comments of clarkkent, Michael Stevens and specially sgjhaghsdg, I now know that my suspicions were correct and I will be doing so as soon as I return back to UK in mid April

Left to their own devices most (but not all) investors are guided by emotions and tend to follow the pack. Discount investors, such as the typical Hargreaves clients know theyre getting a deal cheaper than going down the advisory route. A good investment based adviser will not let them follow their herd instinct and should stop them buying at the peaks and selling at the troughs which is what many investors do. The charges they pay should be cheap in comparison with what they save on losses that otherwise might be suffered. Penny wise and pound foolish comes to mind. My Company is picking up many disgruntled investors who have made serious losses over the past year in funds that they should never have touched via 'discount providers'. If the investors seriously knows how the markets work then lower costs make sense but if not steer clear and take advice!

Advisor say "take advice". Sun rises in the East. More news at 10.

If almost 100% of investors only cash in ISA's at the time of probate (or move to a competitor and still cash in at the time of their death) it appears to me that they are all saving too much and should be cashing them in and enjoying them while they still can thus helping the economy back on its feet again in the process. Why therefore paint it as a negative, its money people dont need to save!! (they currently die holding it in their hands).

I am certainly worried about secret charges made on my investments with Hargreaves and hopefully more transparency will be legally enforced.

Knowledeable insider would have a point but St. James place have returned me 3% on my pension investments over 5 years and that includes dividends rolled up etc., I think I can do better myself, so I am trying the SIPP route, only time will tell and I wont be cashing my SJP but running them along side each other. In 12 months+ I will consolidate to the one thats making the most. It is not the cost of the investment advice that is the issue here it is the shocking returns on investment.

SJP have some of the highest charges in the business, and rather lacklustre funds on their platform, so seriously consider moving. Also have a read of Smarter Investing by Tim Hale.

I've had share ISAs (and previously PEPs) for some years and don't buy managed funds unless I get at least some rebate of the management charge. I hesitate to move my ordinary investment portfolio back to an "advisor" as I know to my cost that constant movement of funds is of little benefit to me but benefits them, and I would have to pay a management fee on top of this.

Long-term research has shown that buying sensibly (i.e. not a risky investment) and holding it for a long period is effective. And tracker funds ALWAYS beat managed funds over the longer term.

It is a shame that HL are effectively discouraging people from buying trackers which are normally cheap to administer and thus should have lower fees.

However I agree with previous writers that governments over the past few years have actively discouraged investors and savers. Having removed the dividend tax benefits received previously by pension fund investors, the original basis for investment has been completely changed. Despite this radical change investors still are not free to remove their funds and make better use of them outside a pension fund.

The only people who benefit from pensions now are higher rate tax payers. For the rest of us the tax gain is largely swallowed up by the fees (up-front and on-going) which gnaw away at our savings.

maybe some isa savers with hl have looked at their returns from Jupiter Absolute Return(much pushed by hl) and decided they would be better off in cash @2.5%....

hl got me on board with their "under one umbrella rhetoric" I have one (relatively small) tracker in the mix which was doing perfectly badly on its own. With the helpof hl its now doing even worse. I, like many others I suspect, am looking at the various options for my pep/isa/sipp. (Im sure mr hargreaves trickle will continue for some time) I dont mind fair charges but the tracker move was foolhardy and ill judged and over time they will, sadly, lose a lot more.

For most of their customers HL are an execution broker only. This means that we make your own investment decisions and have no business holding HL responsible for the investment errors we have made. For months whining investors on this forum have held anyone but themselves responsible for their own investing inadequacies. I use HL because they provide a competitive and efficient execution only trading platform for me to implement my own decisions, not because of their pr and marketing initiatives.

"For most of their customers hl are an execution broker only". I would be interested to see the set of stats that back that statement up. I know several people who have the hl managed service, several who like me transferred several pep/isa/sipp to hl to have them in one place, several who like you use them as an execution broker only and some who have a mixture.The thing about pr and marketing is that with some people , it works. Funny old game eh

I hold most of my ISAs on the co-funds portal & I follow their values on co-funds web-site.

I am aware of the charges.

IF it were possible to cash-in immediately, is this the actual amount I would receive?

Are the daily valuations given after ALL charges have been paid?