Simple ISA Question 30 July 2008 at 11:03AM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 3 replies 419 views

MoneyWorries_2

I have paid the full allowance of £3600 into my IceSave ISA for this tax year - when I was setting it up I chose to have the interest paid annually into my linked account - not into the ISA account. I did this as I thought that because I had already paid in the full allowance I would not be able to add the interest to it as well. I am wrong about that?

If I do have the interest paid into the IceSave - it won't be paid until after the start of the new tax year - as I only opened the account a few weeks ago - will the interest added count as part of next years allowance of £3600?

I am a newbie to saving, now that most of my 'MoneyWorries' are behind me, so forgive the numpty question and thanks for any help.

Hungerdunger

Basically you can ignore the interest you earn from ISAs when considering the £3,600 allowance. If you choose to have it added back into your ISA account it will help increase the total of tax-free savings for next year, and you will still be able to pay in a further £3,600 next year.

If you are sure you don't need access to the interest, see if Icesave will allow you to change and have it paid into your ISA account.

latecomer

Definitely have it added to the ISA balance if you can as you will then gain tax-free interest on it too.

MoneyWorries_2

Thanks very much Hungerdunger :T & latecomer :T - I have already logged on to ask for the interest to be added back into the ISA.

Thank-you both. :j