Full ISA Guide Discussion Area
Comments
-
Sorry I need a bit of clarification. I have a cash isa with 5000 in. I want to basically take this all out and put some in a help to buy and another in a savings account. How do I do this correctly? i.e Not break the golden rule:
"Never, ever, ever, ever withdraw the money yourself! You'll immediately lose all the tax benefits."
Any help would be most appreciated?
Thanks,
Robin0 -
MoneyRonSaver wrote: »Sorry I need a bit of clarification. I have a cash isa with 5000 in. I want to basically take this all out and put some in a help to buy and another in a savings account. How do I do this correctly? i.e Not break the golden rule:
"Never, ever, ever, ever withdraw the money yourself! You'll immediately lose all the tax benefits."
Any help would be most appreciated?
Thanks,
Robin
Forget that 'golden rule'. I've copied my response to a similar question on another thread:
"The advice used to be to avoid withdrawing money from a cash ISA, unless you needed it for a specific purpose - eg house purchase, because of the loss of the tax free status. But that was in the days when the annual amount you could pay into an ISA was low, and cash ISAs were paying decent rates of interest,
However, many things have changed eg:
1)amount you can pay into an ISA each year is now over £15k and will be £20k next year
2)many cash ISAs are now flexible, so if you withdraw you can pay back in (T&Cs etc etc)
3) basic rate taxpayers can now earn up to £1k interest a year, tax free
4)many current accounts pay interest up to 5%, and regular savers pay up to 6%
So.... it really makes no sense at all to save short term for a house deposit in an ISA, or to leave your savings in one if you intend to spend most of them in the forseeable future"
Have you paid any money into your cash ISA since 6th April 2016?
Where are you going to open your HTB ISA?0 -
Thanks for this Badger09.
Do you know if the new rule allowing us to withdraw from an ISA and replace it again applies to existing ISAs or do they have to be new ISAs and specially formulated for it?
I ask because I have a stocks and shares ISA and occasionally I want to withdraw and replace but Interactive Investor say I can't do this with my account. In fact, last item I spoke to them they hadn't applied this change to anything yet.0 -
ISA providers can make any, all or none of their ISAs flexible, including those opened before the flexibilities were introduced.Do you know if the new rule allowing us to withdraw from an ISA and replace it again applies to existing ISAs or do they have to be new ISAs and specially formulated for it?
Most S&S ISA providers do not offer the flexibilities and have no plans to do so.I ask because I have a stocks and shares ISA and occasionally I want to withdraw and replace but Interactive Investor say I can't do this with my account. In fact, last item I spoke to them they hadn't applied this change to anything yet.0 -
HI, I hope you can help us.
We have a client with a disabled daughter aged 20. She has an ISA with some savings for her 21st birthday.
Can you tell me the savings limit for an ISA when you are on ESA?
Thanks in advance for your help.0 -
The ISA limit is the same for all adults. Benefits have no bearing on this.HI, I hope you can help us.
We have a client with a disabled daughter aged 20. She has an ISA with some savings for her 21st birthday.
Can you tell me the savings limit for an ISA when you are on ESA?.
The limit this year 2016/17 is £15,240.
Hope this helps.
Warning: In the kingdom of the blind, the one-eyed man is king.
0 -
Thanks - greatly appreciated0
-
Consumerist is right of course, but in case the two of you are at cross-purposes:Consumerist wrote: »
The ISA limit is the same for all adults. Benefits have no bearing on this.HI, I hope you can help us.
We have a client with a disabled daughter aged 20. She has an ISA with some savings for her 21st birthday.
Can you tell me the savings limit for an ISA when you are on ESA?
The limit this year 2016/17 is £15,240.
You can put whatever you like in an ISA up to the limit of £15240 of new money in a tax year. So if the savings for her 21st birthday have been building for several years she could have tens of thousands in there and it would not be illegal as long as she didn't go over the maximum limit for contributions of new money into the ISA in any one tax year.
If you are on income-based (rather than contribution-based) ESA, the amount of benefit you get depends on your income. If you have lots of savings, you are presumed to be getting an income from them, and if you had over £16k of savings you wouldn't be eligible for income-based ESA at all. But at a low level of savings (under £6k) they don't bother looking at your savings or "capital" to make an assessment.
In between that, i.e. once your savings go over £6k, a variety of means-tested benefits may reduce (it used to be by £1 a week for each £250 of savings over the minimum.
So, if the question is:
- how much can she put into her ISA?
It's currently £15k a year and could be tens of thousands by now if people have been saving into her ISA for her for several years. But if she does have that much, her means-tested ESA would be severely reduced or wiped out.
But if the question was meant to be:
- she has some money in her ISA and receives ESA. How much can the ISA be before they stop paying her the maximum level of income-based ESA that they would otherwise have paid her?
I think it's £6k where it starts to reduce. ISAs are not treated differently to other 'normal' savings accounts in that regard.0 -
bowlhead99 wrote: »Consumerist is right of course, but in case the two of you are at cross-purposes:
You can put whatever you like in an ISA up to the limit of £15240 of new money in a tax year. So if the savings for her 21st birthday have been building for several years she could have tens of thousands in there and it would not be illegal as long as she didn't go over the maximum limit for contributions of new money into the ISA in any one tax year.
If you are on income-based (rather than contribution-based) ESA, the amount of benefit you get depends on your income. If you have lots of savings, you are presumed to be getting an income from them, and if you had over £16k of savings you wouldn't be eligible for income-based ESA at all. But at a low level of savings (under £6k) they don't bother looking at your savings or "capital" to make an assessment.
In between that, i.e. once your savings go over £6k, a variety of means-tested benefits may reduce (it used to be by £1 a week for each £250 of savings over the minimum.
So, if the question is:
- how much can she put into her ISA?
It's currently £15k a year and could be tens of thousands by now if people have been saving into her ISA for her for several years. But if she does have that much, her means-tested ESA would be severely reduced or wiped out.
But if the question was meant to be:
- she has some money in her ISA and receives ESA. How much can the ISA be before they stop paying her the maximum level of income-based ESA that they would otherwise have paid her?
I think it's £6k where it starts to reduce. ISAs are not treated differently to other 'normal' savings accounts in that regard.
Thanks for all that - very helpful0 -
From http://www.disabilityrightsuk.org/employment-and-support-allowance-overviewYou cannot get income-related ESA if your (and your partner’s) capital or savings are over £16,000.
Best to ask the DWP what precisely applies to your client's daughter!0
Categories
- All Categories
- 343K Banking & Borrowing
- 250K Reduce Debt & Boost Income
- 449.6K Spending & Discounts
- 235.1K Work, Benefits & Business
- 607.8K Mortgages, Homes & Bills
- 173K Life & Family
- 247.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards