Newcastle BC 5% cash Isa

Las_Vegas_2

I recently opened Newcastle's cash Isa plus previous years Isa balances and on trying to obtain account details to pay in was informed I was no longer allowed to invest in this account as it was discontinued.

My question is: I was told by the Newcastle I can keep my existing cash in the 5% account and can open another cash Isa with them. I'm a bit confused as I thought you were only allowed one cash Isa. Can you confirm which is correct and is it worth keeping the 5% account to its full term and how would that work if the rest of my Isa is in a different account ie transferring balances?

financial_illiterate

If you've only contributed 'old money' (i.e. previous years ISA's) in this tax year, then you can open a second ISA and deposit 'new' money (from this years ISA allocation) into it.

Next year, you'd then be able to keep both and start a new one, or transfer both to a new one, or possibly (depending on the Newcastle's terms) transfer one into the other.

I'd keep the 5% one at least until a better one that accepts transfers in comes along.

In short, you can have as many ISA's as you like; but you can only contribute 'new' money into one cash ISA per tax year.

KingL

If you've transferred your previous years and paid all of this years allowance into the Newcastle one, you can't do anything until next year at which point you can open a new ISA with anyone and pay into that. Unless you can better the Newcastle rate, you're better off leaving the Newcastle funds where they are.

If you've transferred your previous years and paid less than this years allowance into the Newcastle one, you're stuck. [STRIKE]You can't subscribe to a second cash ISA this tax year[/STRIKE]. Edit - you can if it's with the same ISA manager - see below

If you've transferred your previous years but not paid any of this years allowance into the Newcastle one, you can open a new one with Newcastle or anyone else.

masonic

Newcastle are completely correct that you are allowed to contribute to more than one ISA held with them in the same tax year. If you want to keep the 5% account, you would have to keep any money you contribute to a second Newcastle ISA until the end of this tax year, after which you would be able to move it to another provider as a partial transfer.

masonic

financial_illiterate wrote: »

In short, you can have as many ISA's as you like; but you can only contribute 'new' money into one cash ISA per tax year.

While that is true, there is no restriction on how that ISA wrapper can be spread over individual accounts.

KingL

Interesting - you're saying that I can pay £1000 new cash into A&L ISA Issue 4 in May 2009 and then another £2000 into A&L ISA Issue 5 in October 2009 ? (Depite the fact that when I open the "second" ISA I will be asked to sign a declaration that I haven't subscribed to any other ISAs this year)..... ?

greenface

no i dont think thats right people are saying you can deposit up to your limit in one per year but can move your old into another
spank me if im wrong slap me if im right

masonic

KingL wrote: »

Interesting - you're saying that I can pay £1000 new cash into A&L ISA Issue 4 in May 2009 and then another £2000 into A&L ISA Issue 5 in October 2009 ? (Depite the fact that when I open the "second" ISA I will be asked to sign a declaration that I haven't subscribed to any other ISAs this year)..... ?

You can only do that if A&L allow you to do it, which unfortunately they don't. The ISA guidance notes state that you can only subscribe to...

• one maxi ISA, or *

• one of each type of mini ISA, being a
- stocks and shares component mini ISA, and
- cash component mini ISA.

* This has been removed from the latest version of the document, since maxi ISAs don't exist any more.

...they do not place a limit to how many individual accounts can be put into the cash component mini ISA (or S&S ISA). Banks are required to report how much is subscribed to an ISA, but not how that money is structured within it.

dunstonh

masonic is correct.

Your subscription is with the ISA manager, not the account. Some allow it, some don't but it is their own in-house systems that prevent it if they dont.

Expect to see some ISA managers that dont currently allow it change that stance later this year when the increased ISA allowance comes in. e.g. those that paid in £3600 in April but then have the over 50 allowance available from 6th October.

This flexibility has been in place with S&S ISAs much longer. That is how fund supermarkets can allow you to put funds from different fund houses all in one ISA as its the fund supermarket that is the ISA manager.