Cashing in ISA 13 July 2004 at 4:38PM edited 30 November -1 at 12:00AM in ISAs & Tax-free Savings 3 replies 9.4K views

annc_4

I would like to know if it would be worth me cashing in my ISA. It is a unit growth ISA and approx value £6,000. I have been paying a £100 a month for the last 5 years to the ISA. I would like to purchase a new car and wonderded whether to use the cash in the ISA or take out a bank loan.

lisyloo

Well the real question is -

Do you believe that the growth on your ISA in future years will be higher or lower than the interest rate on your loan.

If the answer is higher then leave the money in the ISA.
If it's lower then use the ISA money.

It is impossible for anybody to give you an exact answer because nobody knows what the prospect is for growth in the future.

Is there anyway you could borrow the £6K on a 0% credit card.
I know this ight not last forever but it might give your money longer to grow in the ISA.

Suzz_2

If you've been paying £100/month for 5 years and its worth £6000, that's a 0% gain!!! Quite good - some of my investments have done far worse over 6 years.

I recently had a valuation of a pension fund that had been running over 8 years. I calculated I'd paid in about £6500 and it is now worth about £5000!!

I personally would be loathed to take it out now, having not gained anything. But, as lisyloo says, no-one knows what will happen in the future.

A compromise may be to cash in half of it and get any more thay you need at 0% off a credit card.

dunstonh

the pound cost averaging you have achieved over the last few years means that you must have bought some units very cheaply. It would be a shame to call it a day now. However, if you need the money and have no other source, then fair enough.