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Best Isas and other money tips for 2019

best Isas for 2019What will happen in 2019 and how will it impact your money? Today I’ve polished up the Mystic Minted crystal ball for a quick look ahead to next year.

Of course nobody knows what will happen in 2019. Even the experts cannot accurately predict events and their outcome. But there are probably a few themes to keep an eye on.

Firstly, I don’t believe interest rates will be zooming upwards any time soon. In fact, with all the Brexit and US-China trade war worries going on, the authorities will be too afraid to lift them. Or, if the worst happens, they’ll have to drop them. There are some decent rates around at the moment so my action plan is to lock into these while they’re still available. SMM likes the easy access accounts from Marcus which pays 1.5% (includes 12-month bonus) or Tesco Internet Saver and Post Office Online Saver, both paying 1.45%. 

For fixed rate accounts, www.thisismoney.co.uk says the best rates are currently from digital bank Atom paying 2.05% for one year and 2.3% for two years (£50+ is the minimum deposit).

Borrowers should also take note of where interest rates are going. The opposite advice is true for you if you’re paying a mortgage: don’t lock into a rate for too long because other, lower rates may come along shortly.

Second, the jittery stock market will continue to see-saw on good or bad news. Experts say the most bombed out economies (UK, US and emerging markets) could outshine the others, especially if the political issues eg Trump and Brexit are ironed out. I won’t be selling my existing Isas or moving into cash or bonds because that only crystallises my (currently paper only) loss. Nobody can exactly predict when an upturn will come and you have to be in the market to catch the rally when it arrives. However, I won’t be putting lump sums in. Regular saving every month or drip-feeding on the dips is the best strategy. If you’re really nervous, at least get the money into the Isa in cash and let it sit there until you feel confident enough to swop into shares or bonds. That way at least you still pick up the tax benefits which will be valuable in the future.

Lastly, because of all the above, I think house prices will continue to stall, especially in the more expensive areas such as London and the south-east. If you’re banking on your property as a pension (not always a good idea) or some other kind of cash generating machine, you might need to factor that in. Problems on the high street – with internet retailers taking over from traditional shops – won’t help.

What a gloomy picture! But it may not come to pass. There are so many variables in play: we could see a very different outcome. If Brexit is sorted, or someone presses freeze on Mr Trump, there could be the most almighty relief rally. The best strategy has to be to prepare for the worst and hope for the best. And have a big glass of wine. Happy New Year!

See our SMM guide to getting the best savings rates here.

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Sunday, 26 May 2019