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  • FIRST POST
    • brandydog
    • By brandydog 3rd Oct 17, 10:05 AM
    • 79Posts
    • 12Thanks
    brandydog
    should i lose my isa status for good
    • #1
    • 3rd Oct 17, 10:05 AM
    should i lose my isa status for good 3rd Oct 17 at 10:05 AM
    i have £60.000 in isa.s maturing soon should i put it back into isa,s which makes less interest
    or should i put it into a regular account with more interest and lose my isa status for good
    with all my savings i get over
    £1.000 interest
    thanks all for your opinion
    ie what accounts would you recomend
    Last edited by brandydog; 03-10-2017 at 10:08 AM.
Page 1
    • chockydavid1983
    • By chockydavid1983 3rd Oct 17, 10:12 AM
    • 484 Posts
    • 290 Thanks
    chockydavid1983
    • #2
    • 3rd Oct 17, 10:12 AM
    • #2
    • 3rd Oct 17, 10:12 AM
    Depends when you may need to access the money.
    If it's > 10 years, a switch to a S&S ISA should be considered.
    If access is required, current accounts & regular savers pay far more than cash ISAs- you get a £20k ISA allowance per year so can regain ISA status pretty easily, depends how much you have coming in each year.
    Last edited by chockydavid1983; 03-10-2017 at 12:26 PM.
    • Alexland
    • By Alexland 3rd Oct 17, 11:07 AM
    • 793 Posts
    • 493 Thanks
    Alexland
    • #3
    • 3rd Oct 17, 11:07 AM
    • #3
    • 3rd Oct 17, 11:07 AM
    Also depends if you expect to continue adding to your saving pot. If not then even if interest rates go up so the return signicantly exceedes your personal allowance you could start ISA wrapping it again and be done in less than 3 years (assuming you start mid way through a tax year) or just pay the tax on the extra interest whichever works out best.

    If this is for long term and you dont need instant access then I agree transfering a proportion into stocks and shares if you can handle the volatility.

    Alex
    • mt99
    • By mt99 3rd Oct 17, 11:13 AM
    • 453 Posts
    • 220 Thanks
    mt99
    • #4
    • 3rd Oct 17, 11:13 AM
    • #4
    • 3rd Oct 17, 11:13 AM
    I wold keep it as an ISA for now. Yes, cash ISAs seem to pay about 20% less than cash accounts but you don't pay tax so you kind of break even.
    • EachPenny
    • By EachPenny 3rd Oct 17, 11:49 AM
    • 3,388 Posts
    • 6,328 Thanks
    EachPenny
    • #5
    • 3rd Oct 17, 11:49 AM
    • #5
    • 3rd Oct 17, 11:49 AM
    I wold keep it as an ISA for now. Yes, cash ISAs seem to pay about 20% less than cash accounts but you don't pay tax so you kind of break even.
    Originally posted by mt99
    It depends on the OP's tax position. If they pay higher rate or are likely to in the next 3 years then the pendulum swings towards keeping it in the ISA.

    But there are ways of getting far better returns on cash deposits than in a cash ISA or a similar conventional savings account. Many of us on here are making use of regular savers and interest paying current accounts to get overall rates of 2% plus. It should be possible to get £60k earning at least 2% in a relatively short space of time. Then the difference between the interest is considerably more than 20% above the typical rates on a cash ISA, unless you are willing to go for a long-term fix on the ISA.

    I would probably look for the best rate on an easy access cash ISA which allows transfers in, move the £60k over, and then look at transferring it out into the higher interest earning non-ISA options. That way if you change your mind the remaining balance in the ISA still has its ISA status.

    If the ISA is a flexible one then you should also be able to 'holiday' the money in higher paying current accounts, and return it to the ISA before the end of the tax year to get the best of both worlds.
    Last edited by EachPenny; 03-10-2017 at 11:52 AM.
    "In the future, everyone will be rich for 15 minutes"
    • mt99
    • By mt99 3rd Oct 17, 1:24 PM
    • 453 Posts
    • 220 Thanks
    mt99
    • #6
    • 3rd Oct 17, 1:24 PM
    • #6
    • 3rd Oct 17, 1:24 PM
    Agree with all of that very good advice - one thing to consider however is 60k of ISA money would take 3 years to replace back under the tax free wrapper and if interest rates rise may well have need of the tax relief offered by cash ISA

    not saying that will happen but there's just something worth considering
    • jimjames
    • By jimjames 3rd Oct 17, 1:33 PM
    • 12,242 Posts
    • 10,778 Thanks
    jimjames
    • #7
    • 3rd Oct 17, 1:33 PM
    • #7
    • 3rd Oct 17, 1:33 PM
    I think it's very unlikely that interest rates will rise significantly in the next 3 years. If rates do start rising then you should have a number of years to be able to move money back. But if you are looking at long term money then keeping it all as cash doesn't make a lot of sense. There is also no reason why it all needs to be moved to the same place.

    You could move £20k to S&S ISA, £20k to cash savings accounts and keep £20k in cash ISA for example
    Remember the saying: if it looks too good to be true it almost certainly is.
    • planteria
    • By planteria 3rd Oct 17, 2:21 PM
    • 4,880 Posts
    • 1,070 Thanks
    planteria
    • #8
    • 3rd Oct 17, 2:21 PM
    • #8
    • 3rd Oct 17, 2:21 PM
    agreed, splitting into separate lumps can make sense.
    i've built up a fair ISA pot too. in the last few weeks we've been looking at new homes, and i can see a logic in giving up my ISA to buy a house in a nicer area.. even though i have considered my ISA to be part of my long-term/retirement planning.
    • EachPenny
    • By EachPenny 3rd Oct 17, 2:39 PM
    • 3,388 Posts
    • 6,328 Thanks
    EachPenny
    • #9
    • 3rd Oct 17, 2:39 PM
    • #9
    • 3rd Oct 17, 2:39 PM
    Agree with all of that very good advice - one thing to consider however is 60k of ISA money would take 3 years to replace back under the tax free wrapper...
    Originally posted by mt99
    Yes, if you withdraw all the money from a non-flexible Cash ISA or don't return it to a flexible one before the end of the tax year. But using a flexible cash ISA gives a neat solution.

    For example, if the OP moved £15,001 to a flexible cash ISA (assuming £1 is the minimum balance required) then the money could be withdrawn and paid into 3 Bank of Scotland Vantage current accounts earning 2% interest. If the £15k is then transferred back into the ISA before the end of the tax year it will retain the ISA status. Shortly after, it can come back out and return to the BoS Vantage accounts for another year at 2% (or whatever the going rate is then). The interest rate on the ISA is unimportant as the money won't be in it for long.

    It is a win-win... you earn a higher rate of interest, but keep the ability to return the money to ISA protection if the circumstances change. There are some practical considerations to take into account, so it isn't quite as easy as it might sound, but so long as you are careful and ensure you follow all the T&C's it is one way of enhancing your savings income.
    "In the future, everyone will be rich for 15 minutes"
    • grandst
    • By grandst 3rd Oct 17, 7:40 PM
    • 36 Posts
    • 22 Thanks
    grandst
    Taxes on saving have fallen over the years from a peak of 50% for basic rate taxpayers and 98% for high rate taxpayers, there's no guarantee we wont be heading back the other way. I would be very reluctant to remove any savings from tax free ISA's.
    • Dazed and confused
    • By Dazed and confused 3rd Oct 17, 8:24 PM
    • 1,990 Posts
    • 897 Thanks
    Dazed and confused
    And even though £500/£1000 of non ISA interest can now be taxed at 0% it still remains taxable income so there are some who have no tax to pay on the interest but they will have to pay more tax on their other income as a result of having the interest in the first place.

    Won't affect everyone but is something to consider for some.
    • Eco Miser
    • By Eco Miser 4th Oct 17, 12:37 AM
    • 3,230 Posts
    • 2,989 Thanks
    Eco Miser
    Taxes on saving have fallen over the years from a peak of 50% for basic rate taxpayers and 98% for high rate taxpayers, there's no guarantee we wont be heading back the other way. I would be very reluctant to remove any savings from tax free ISA's.
    Originally posted by grandst
    And there's no guarantee that ISAs will retain their tax-free status if the Chancellor decides to raise the tax take from savers.

    Meanwhile I will shelter my investments in an ISA, and rely on allowances for my savings interest.
    Eco Miser
    Saving money for well over half a century
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