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  • FIRST POST
    • MSE Sally
    • By MSE Sally 11th Apr 14, 12:12 PM
    • 70Posts
    • 27Thanks
    MSE Sally
    Tell us you cash ISA questions
    • #1
    • 11th Apr 14, 12:12 PM
    Tell us you cash ISA questions 11th Apr 14 at 12:12 PM
    Hi folks,

    We've just updated our Cash ISA guide to include FAQs at the end. We'd love to know if we've missed anything so if you've got an ISA question we've not already answered, post it below and we'll try to help.

    Thank you

    MSE Sally
Page 1
  • Lyyynda
    • #2
    • 11th Apr 14, 2:40 PM
    • #2
    • 11th Apr 14, 2:40 PM
    Hi, I have a web cash ISA with Nationwide which at the moment is on a goodish rate of interest, this rate will end in August to a much lower rate. I would like to know if I can put in my present allowance now at the good rate and in August when the new NISA comes in and Nationwide hopefully have better rate NISA account, can I then transfer all the old ISA into that account even if I have put money into it already this tax year, especially as the allowance will go up in July? Or can I take the existing web ISA and transfer it to another provider along with the remainder of my ISA allowance.
  • innovate
    • #3
    • 11th Apr 14, 3:00 PM
    • #3
    • 11th Apr 14, 3:00 PM
    Answer to first Q should contain a red hot warning that people need to ensure they are not going over £85K with the same financial institution, across all their deposits.
  • somerset fox
    • #4
    • 11th Apr 14, 3:15 PM
    Co-Op ISA question
    • #4
    • 11th Apr 14, 3:15 PM
    I've been with the Britannia Building Society for years and have a cash ISA with them. Now they have merged/ morphed into the Co-Op Bank, and the Co-op bank seems to be in trouble, should I withdraw my savings and look for a (potentially) more stable bank, or ride out the storm and stick with Co-Op. Wouldn't want to find my life savings gone if the bank goes belly up.
    • Archi Bald
    • By Archi Bald 11th Apr 14, 3:49 PM
    • 9,347 Posts
    • 7,394 Thanks
    Archi Bald
    • #5
    • 11th Apr 14, 3:49 PM
    • #5
    • 11th Apr 14, 3:49 PM
    It's a good start, MSE, by way to go before you can be proud of this FAQ.

    The conclusions of the question whether cash or S&S ISA is incredibly misleading

    In short, small investors who won’t use their capital gains and are putting cash in shares investments will gain more using their cash ISAs to the limit, then putting the rest in shares. Big investors, especially those putting money in bonds, should max out their stocks & shares ISAs.
    It is not a question of big vs small. It is in the first instance a question of the purpose of the money, and for how long a person wants to put it away. Another fundamental is that investments have historically outperformed cash, and that it isn't just about tax savings.

    There is nothing wrong if you don't have a grasp on such fundamentals but it is rather shocking if you then want to comment on the matter, MSE.

    A further issue IMO is that MSE do not talk about SIPPs as an alternative to both, cash and S&S ISAs.

    Next, on the question: "Can I set up a monthly standing order into my ISA?"
    The answer given is obviously not true for all FRISAs, though Lloyds and TSB currently are the exception to that. The question of FRISAs vs instant access vs notice ISAs should be addressed separately.

    Next, this answer:
    Interest is calculated daily so what you're actually paid is based on how much you've had in the account when it's payable.
    Probably well meant but totally incorrect. What you are actually paid is not dependent on how much you have had in the account when it's payable but on how much you had in the account on each day when the daily calculation took place.
    • Archi Bald
    • By Archi Bald 11th Apr 14, 3:52 PM
    • 9,347 Posts
    • 7,394 Thanks
    Archi Bald
    • #6
    • 11th Apr 14, 3:52 PM
    • #6
    • 11th Apr 14, 3:52 PM
    It's a good start, MSE, by way to go before you can be proud of this FAQ.

    The conclusions of the question whether cash or S&S ISA is incredibly misleading

    [/quote]In short, small investors who won’t use their capital gains and are putting cash in shares investments will gain more using their cash ISAs to the limit, then putting the rest in shares. Big investors, especially those putting money in bonds, should max out their stocks & shares ISAs.[/quote]

    It is not a question of big vs small. It is in the first instance a question of the purpose of the money, and for how long a person wants to put it away. Another fundamental is that investments have historically outperformed cash, and that it isn't just about tax savings.

    There is nothing wrong if you don't have a grasp on such fundamentals but it is rather shocking if you then want to comment on the matter, MSE.

    A further issue IMO is that MSE do not talk about SIPPs as an alternative to both, cash and S&S ISAs.

    Next, on the question: "Can I set up a monthly standing order into my ISA?"
    The answer given is obviously not true for all FRISAs, though Lloyds and TSB currently are the exception to that. The question of FRISAs vs instant access vs notice ISAs should be addressed separately.

    Next, this answer:
    Interest is calculated daily so what you're actually paid is based on how much you've had in the account when it's payable.
    Probably well meant but totally incorrect. What you are actually paid is not dependent on how much you have had in the account when it's payable but on how much you had in the account on each day when the daily calculation took place.

    NB. Your ISA transfer guide needs updating to say that from July 1, transfers from S&S to cash is possible. It also needs updating to cover S&S transfers in general. Although you could opt to say that you don't know how S&S transfers work and therefore you only focus on cash ISAs.
    • jimjames
    • By jimjames 11th Apr 14, 6:57 PM
    • 12,017 Posts
    • 10,455 Thanks
    jimjames
    • #7
    • 11th Apr 14, 6:57 PM
    • #7
    • 11th Apr 14, 6:57 PM
    The first question should be "do I need an isa/is an isa right for me"

    All the way through the article there is the assumption and statement that an isa is always the best option and the use it or lose it mentality. That's fine if you have £15k of savings but when the average is under £2000 it isn't good advice.

    You should get the best rate for your money regardless of whether that is taxed or in an isa. No rush at all to get that money into an isa by march 2015 as your article claims.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • jimjames
    • By jimjames 15th Apr 14, 1:46 PM
    • 12,017 Posts
    • 10,455 Thanks
    jimjames
    • #8
    • 15th Apr 14, 1:46 PM
    • #8
    • 15th Apr 14, 1:46 PM
    The ISA page is still not giving the best advice. How about having a flow chart for readers to work out if an ISA is worthwhile for them?

    For someone with small amount of savings in a 5% current account there is absolutely no need to move the money in March 2015 to an ISA if the rate is still better outside.

    Giving FAQs that help people to get the best return is my understanding of what MSE should be about.

    http://www.moneysavingexpert.com/savings/best-cash-isa

    You also need to look at the bigger, long-term picture. Saving in an ISA guarantees tax-free status on that cash for as long as it's kept in an ISA. Interest on a current account is likely to be short-lived. Though in an ideal world, you'd have both. Try this:
    First, put cash in a high-interest bank account. As long as the after-tax rate beats your chosen ISA, do this now rather than using your ISA allowance. See Current Accounts for the full options.
    Then, use the cash to open an ISA in March 2015. A week before the tax year ends, move the cash out of the bank account to fill your ISA allowance. That way you get the short-term high rate from the banks, but you still get the tax-free benefit of your ISA allowance. See Martin's ISAs vs high-rate bank accounts blog for full details.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • jt3
    • #9
    • 15th Apr 14, 6:04 PM
    • #9
    • 15th Apr 14, 6:04 PM
    Is it legal to transfer an existing cash isa into a new account paying a better rate for the current tax year 1.8%. Then set up a new account paying a 3% on £15k with no transfers in?
    The main purpose (aside from rates) is to prevent exceeding £85k Guarantee.
    • saintalan
    • By saintalan 15th Apr 14, 8:33 PM
    • 551 Posts
    • 192 Thanks
    saintalan
    Is it legal to transfer an existing cash isa into a new account paying a better rate for the current tax year 1.8%. Then set up a new account paying a 3% on £15k with no transfers in?
    The main purpose (aside from rates) is to prevent exceeding £85k Guarantee.
    Originally posted by jt3
    Yes provided by existing you mean nothing paid in 2014/15 yet.

    ...and yes to the 3% for 15k, please tell us all with whom. Don't forget you can only pay in £5940 before 1 July.

    Alan
  • innovate

    ...and yes to the 3% for 15k, please tell us all with whom. Don't forget you can only pay in £5940 before 1 July.
    Originally posted by saintalan
    Well, you can get a 3% ISA with transfers in. Just takes a teeny weeny little bit of research to find it amongst the very few posts on the MSE ISA board.
    • saintalan
    • By saintalan 15th Apr 14, 8:50 PM
    • 551 Posts
    • 192 Thanks
    saintalan
    Well, you can get a 3% ISA with transfers in. Just takes a teeny weeny little bit of research to find it amongst the very few posts on the MSE ISA board.
    Originally posted by innovate
    Yes but the poster jt3 said for a new ISA not the transfer in.

    Nevertheless I guess I should have done a teeny weeny little bit of research. It was meant to be a throw away question having aswered his post.

    Was also assuming it wasnt a Fixed Long Term or Regular Saver.

    Cheers

    Alan
    Last edited by saintalan; 15-04-2014 at 9:30 PM.
  • innovate
    Yes but the OP said for a new ISA not the transfer in.

    Nevertheless I guess I should have done a teeny weeny little bit of research. It was meant to be a throw away question having aswered his post.

    Was also assuming it wasnt a Fixed Long Term or Regular Saver.

    Originally posted by saintalan
    Easy to get a 3% new ISA, too. Including a lumpsum deposit one, not just a Regular Saver ISA. And it isn't a Fixed Long Term one either - nor an entirely an instant access one, but certainly not one of those 1 or more year fixed term ones.

    'nuff said. No point in me repeating stuff that is being discussed in other threads on the same board.
  • jt3
    Thank you Alan. You did indeed understand my question and answer it fully.
    The 3% is for locking away for 5 years & is listed as one of Martin's top offers.
    Most accounts are offering an additional top up option in July to £15k if the account holder wants to.
  • innovate
    Thank you Alan. You did indeed understand my question and answer it fully.
    The 3% is for locking away for 5 years & is listed as one of Martin's top offers.
    Originally posted by jt3

    The 3% I am talking about is not a 5-year deal, and it is not mentioned in Martin's top offers. Doesn't make it any less viable, quite the contrary. The main MSE site isn't the be all and end all, particularly not when it comes to ISAs, as is very obvious from several other threads on here.
    • bsms1147
    • By bsms1147 15th Apr 14, 9:18 PM
    • 1,937 Posts
    • 3,458 Thanks
    bsms1147
    I digress.
    • sunshineandlollipops
    • By sunshineandlollipops 17th Apr 14, 12:08 AM
    • 29 Posts
    • 104 Thanks
    sunshineandlollipops
    Previous ISAs
    Hello,

    I've been trying to figure this out myself and am getting very confused!

    I have 2 previous cash ISAs and have just opened the new Nationwide cash ISA. However, this doesn't allow transfers in and I have since then realised that my oldest ISA with Virgin money goes down to 0.1% interest if no new payments are paid in.

    Am I correct in thinking that as I have already paid a deposit into this years Nationwide ISA I can't pay anything into the Virgin one to top the interest back up? If so, would the best option be to just leave the £3k in the rubbish account and make sure I choose an ISA that allows transfers next year or is there a better alternative?

    Any help would be much appreciated! Thank-you!

    xx

    • hgt
    • By hgt 17th Apr 14, 12:40 AM
    • 193 Posts
    • 131 Thanks
    hgt
    Yes that's correct, as you've paid money into the Nationwide ISA during the current tax year, you've 'subscribed' to an ISA, so can't pay new money into any other ISA for the remainder of the tax year. So no, you won't be able to top up your Virgin ISA.

    However, what you can do is to open yet another new ISA (one which accepts transfers in) and transfer your Virgin ISA into it. The trick is not to pay any money into the new ISA when you open it, then follow the transfer process of the new provider. Depending on the rates, you might wish to consolidate both your old ISAs. In fact I believe Virgin have an account paying 1.5% at the moment, they would be able to transfer your old Virgin ISA over the phone if you were happy to stick with them.

    Though, as many people will tell you on here, you may get a better rate outside of an ISA, using one of the high interest current accounts etc, so it might be worth checking that option out too.
  • julesemma
    Cash is a for pensioner short term
    Hi, my mother in laws cash ISA has just matured with Lloyd's TSB, she has £13,482 in it. We went to speak to bank and the best they could give her was 2.15% fixed for 4 yrs. I said I would look at other rates. I don't believe she will ever have to access this money in her lifetime.
    My question is I am about to become her Power of Attorney, she only receives her state pension, but will soon need to claim a disablement benefit. When I tried last year and said to benefits about Power of Attorney they told me that her benefit money would have to be paid into my bank account.
    So will this mean that her banking will all have to be in my name, and if so do we transfer to a new higher paying ISA now, or after Power of Attorney comes into force?
    Help!
    • saintalan
    • By saintalan 17th Apr 14, 6:53 PM
    • 551 Posts
    • 192 Thanks
    saintalan
    Hi julesemma welcome to the forum. You will find a vast amount of info around.

    First, when you have a POA strictly speaking you should hold funds in a separate account for that purpose. Not all do though. It could be in your mums and you give the bank the POA or it could be yours or joint. However it is best that the account is separate from your personal finances

    Next will your mum's total income mean she will pay tax? Chances are that you can earn a better interest rate outside of an ISA. There are several current accounts discussed on forum but as an example a Santander 123 a/c could earn 3% up to £20,000 with conditions. Even if basic tax needed to be paid that woud mean 2.4% better than most ISA.

    You may get a lot more responses and better than mine if you reveal as much info as you feel able then you will get more accurate info.

    You say your mum may not need the money so there maybe other funds etc that could impact tax and whether an ISA is necessary or not. In any case this years ISA up to £15000 from July 1 will be available up to 5 April 2015 with better or worse rates, but there is no hurry at the mo.

    Hope thats a help to give you food for thought.

    Cheers, both my wife and I have been there with mums.

    Alan


    Rates in general are not great at the mo
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