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ISA additional £1.500 deposit not allowed.

biltibby
biltibby Posts: 7 Forumite
in Savings & investments
hi. new to this... wonder if anyone can help. I have an ISA for this year with a local Building Society, and, i have tried to add my £1.500 allowance into it, and been told that i am not allowed to do so because it is a fixed interest account.. Is this right. I thought all over 50's could do this. thanks for any help or advice...
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Comments

  • jem16
    jem16 Posts: 19,736 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If it's a fixed rate ISA you will probably not be able to add to it.

    Ask your ISA provider about opening another ISA with them to use your extra alliowance.
  • Baldur
    Baldur Posts: 6,565 Forumite
    biltibby wrote: »
    I thought all over 50's could do this. thanks for any help or advice...
    See http://www.hmrc.gov.uk/isa/bulletin14.htm
    Implementing the new limits

     The Financial Services Authority (FSA) have confirmed that it is a commercial decision for ISA providers on whether they decide to allow eligible customers (those born on or before 5 April 1960) to subscribe up to the higher ISA limits from 6 October 2009.


    As jem16 says, your only option is likely to be if the building society will permit you to open another ISA account with them for the additional £1,500 - Nationwide do this for their fixed rate ISA customers, according to posters on these boards.
  • Hungerdunger
    Hungerdunger Posts: 964 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    I'm not advising you to do this, but a couple of months back I heard a commentator on a radio finance programme say that if you were to open a new ISA for the extra allowance with a different Bank or B. Soc, HMRC would be very unlikely to do anything about it.

    After all, you may have broken the rule about opening more than one ISA in a year, but you won't have paid any less tax than if your original Building Society had let you pay in extra funds.
    "The trouble with quotations on the Internet is that you never know whether they are genuine" - Charles Dickens
  • AnAlternativeView
    AnAlternativeView Posts: 48 Forumite
    The problem is down to HMRC and their Rules. Only a couple of providers (including N/wide as identified) were able to have more than 1 ISA opened in the year with the provider following agreement with HMRC.
  • Primrose
    Primrose Posts: 10,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've been Money Tipped!
    The other option is to transfer your ISA to another provider who WILL allow you to top up with the extra £1500. I know Kent Reliance will accept transfers in. They are currently offering a one year fixed term ISA at 3.2% and we were allowed to top up our ISAs with the extra money in the middle of the term.
  • AnAlternativeView
    AnAlternativeView Posts: 48 Forumite
    But if you transfer an existing Fixed Rate you will pay a penalty - thus why he can't put further money in either.

    If you can give notice, you might be still able to do that insteatd - but check the penalty conditions on the Fixed ISA you have.
  • Primrose
    Primrose Posts: 10,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've been Money Tipped!
    How much is the penalty? In the long run, if this ISA is intended to run for many years, it may well be worth paying the penalty rather than losing compounded interest on the additional £1500 top-up for x number of years, especially if the rate of income tax rises in the future.
  • kostigovs
    kostigovs Posts: 215 Forumite
    jem16 wrote: »
    If it's a fixed rate ISA you will probably not be able to add to it.

    Ask your ISA provider about opening another ISA with them to use your extra alliowance.


    My wife and myself had no problems adding the £1500 into our existing HBOS fixed rate ISA.
  • Baldur
    Baldur Posts: 6,565 Forumite
    edited 6 November 2009 at 4:18PM
    kostigovs wrote: »
    My wife and myself had no problems adding the £1500 into our existing HBOS fixed rate ISA.
    Others have not been permitted to add the extra allowance even to variable rate Cash ISAs (e.g. Egg), just because one provider allows it, doesn't mean that all will.
  • sagalout1954
    sagalout1954 Posts: 418 Forumite
    Photogenic
    First Direct and Halifax both fixed rate allowed it, and they wrote to hubby and me just beforehand to say so.....we duly paid it in.

    We 'transferred in' to both at the beginning of this financial year so that's clearly allowed too.
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