@Sarenco Ok, I fully accept this is not a 'cheap' option. But what are the alternatives.
Lets assume a couple have been good with their finances and are in a very decent position. The couple both have good PAYE jobs (100k plus each), no kids, mortgage paid or on very low tracker and live a very good lifestyle. They max their pension contributions, but still have 20 years to retire. Between them they are in a position to conservatively save 2k a month after all of that, including the annual shopping tip to NYC. They already carry a sizeable emergency fund on deposit (this situation is not me personally!)
Their options for saving/investing are:
1. Put the money into a multiple regular savers @3% (max) before DIRT @40% in 2017. At the end of the year they have another 24k in the pot.
2. Invest it into something that may pay a better return. There are funds out there with an annualised return over 10 years in excess of 8%. Take off the 1% AMC, and you are still left with 7%. I accept Exit Tax at 41% is a pain, but it still leaves a 4% return after all charges and taxes
3. Balance between the two, and save up the funds for 6 months/1 year and then do a once off purchase of a ETF with much reduced costs - but also have the Exit Tax issue
4. Put 1k into deposits and 1k into investments each month and offset the risk in some way
I agree though, the charges and taxation environment do not make this a 'cheap' option, but what are the genuine alternatives for people with spare cash that are looking to make it work in the medium/long term?
This is where something like an ISA would be so attractive for people in this position - but sadly I cannot see it coming in the short term. Although the payments in are after tax, at least the returns are not taxed. I think a Junior ISA would be a major step forward to getting people to save for the future, or even a Mortgage Saver ISA etc