I've really screwed up with my ISAs tonight :(

swayzak

Hello

I lost my dad recently, and so not really thinking straight.

Tonight I closed my Virgin ISA (85k @ 0.25% interest) and transferred the money to my nominated account (eg current account) thinking I could then transfer this to my new cash ISA with a different provider.

Of course I should have used an ISA transfer form so I assume I have now lost the tax-free interest on all that money

What would be the best "safe bet" alternatives now this money is out of the ISA system ?

I'm a high tax rate payer

Thanks

rallycurve

50k to premium bonds and 20k into a new ISA? That way you'd retain 70k tax free. Assuming you haven't put any money into an ISA this tax year

kimwp

Give virgin a call and see if they will cancel the action.

eskbanker

If the account was a flexible ISA and they can be persuaded to reopen it, then you can simply pay the money back in.

You may re-open an ISA where it was closed earlier in the same tax year if the investor wants to either:

• resume subscriptions
• make flexible ISA replacement subscriptions for funds from a previous year that they withdrew in the current year

https://www.gov.uk/guidance/close-void-or-repair-an-isa-if-youre-an-isa-manager#closing-an-isa

justpassingthrough24

I'm sorry about your dad

As others have said, try and speak to Virgin first to see if they can reverse the transaction. 

Otherwise if you don't need the money anytime soon, you could consider a SIPP? Would give you immediate savings as a high rate tax payer and can rollover up to 3 years of the annual allowance.

swayzak

Thank you all

I had already opened Closer Brothers ISA with this year's 20k allowance, and wanted to move the Virgin money into this too to take advantage of the (much) higher interest rate

I will call Virgin this morning (but don't hold out much hope)

So I effectively have 86k to reinvest somewhere (but want low/near zero risk, like an ISA)..

swayzak

Virgin are going to reinstate the ISA

Just need to expedite the bounce back of the 84k I transferred over to Closer Bro account last night & then transfer back to my Virgin ISA

Then do it properly next time !

Thanks again

refluxer

That's great news and reflects well on Virgin if they can do that for you. Hopefully that'll work out because saving £105k with any one bank wouldn't be wise, especially if you're risk averse.

£85k is the maximum you should save (in total) across all the accounts you hold with any one financial institution because that's the most you'll get back from the FSCS if they were to fail. The only exception to this is NS&I where all your deposits are secure, no matter what the total.

eskbanker

swayzak said:

Tonight I closed my Virgin ISA (85k @ 0.25% interest) and transferred the money to my nominated account (eg current account) thinking I could then transfer this to my new cash ISA with a different provider.

Of course I should have used an ISA transfer form so I assume I have now lost the tax-free interest on all that money

swayzak said:

Virgin are going to reinstate the ISA

Just need to expedite the bounce back of the 84k I transferred over to Closer Bro account last night & then transfer back to my Virgin ISA

Just to emphasise, the word 'transfer' does have very specific connotations when discussing ISAs, i.e. it signifies a direct movement from one ISA to another, so, even though the word can legitimately be used in a looser sense, it's probably better to stick to 'deposit' and 'withdraw' for movements into and out of the ISA shelter, to minimise potential confusion.  Glad that VM are playing ball, and, as both you and Close Brothers recognise, you can't deposit £84K into an ISA anyway, so yes, that payment will bounce back to your current account.