Increase in ISA allowance on 6th Oct by £1500...

ed123_2

...I have been told by Leeds BS that you can only add this to your existing 09/10 ISA (£3600) and not open a new one with another provider......Is this correct?....thanks ed

Lokolo

I think so yes.

And its only for over 50s.

evenasus

Lokolo is correct.
You can only open one cash ISA with one provider each financial year.

I'm over fifty, so will be adding the extra £1500 next month.

oldfella

you can transfer the Leeds ISA elsewhere, and then add to the new provider

Rollinghome

The position seems to be as already said, that you can only add money as part of this year's allowance using a single provider - which doesn't mean you can't add money by opening a second savings account provided that new account is with the same provider.

So if you put money in an account that's now closed, such as a fixed rate account, you can top-up to the limit by opening a second account with the same provider.

What I'm not too sure about is whether you can subsequently move those two accounts independently of each other, for example by keeping the first account with the original provider while at some date moving the second account somewhere else. Does anyone know?

jimbow25

You can transfer different accounts to different providers, yes, so long as you're not trying to transfer only part of the current year's allowance.

You could split £10,000 of prior year contributions from 1 account to 5 different aco!!!!s if you really wanted to (you will normally see a box on the transfer form asking how much of prior year contributions you want to shift if not all of them).

Rollinghome

Thanks Jimbow. So you could for example open two accounts this year with Bank X with £1k in each then next year tranfer the cash in one account to Bank Y and the other to Bank Z? Good, so it could still make sense to take up the full allowance even if the second account on offer isn't the best around.

rb10

Rollinghome wrote: »

So if you put money in an account that's now closed, such as a fixed rate account, you can top-up to the limit by opening a second account with the same provider.

Check with the bank first though, as some, e.g. Halifax, have changed their T&Cs to allow an additional credit to fixed rate ISAs, to let people use their extra £1500 within their existing ISA that would have otherwise been closed.

KingL

So you could for example open two accounts this year with Bank X with £1k in each

This isn't a guaranteed right, it's still up to the individual ISA provider whether they let you open a second cash ISA with them. It's just that you wouldn't be breaking the HMRC regs by doing so.

Unless you have a 'closed' fixed rate looking to top up to the annual allowance (e.g you are an over 50 looking to add the extra £1500 on Oct 6th) or you are edging the 50k protection limit with an institution, I'm not sure why you'd want to have more than 1 cash ISA in the same year.

Rollinghome

KingL wrote: »

Unless you have a 'closed' fixed rate looking to top up to the annual allowance (e.g you are an over 50 looking to add the extra £1500 on Oct 6th) or you are edging the 50k protection limit with an institution, I'm not sure why you'd want to have more than 1 cash ISA in the same year.

I'd guess with many people opting for fixed-rate accounts this year that are now closed, and so can't be topped-up, that quite a few savers might want to do exactly that.

Either because they didn't have the full amount available at the time or, for over 50s who after all tend to have the most in savings, because the limit for them goes up next month. Which is presumably why several institutions have now changed their rules to accomodate it.

The difficulty might be some that offered the best fixed-rate deals earlier, such as Yorkshire BS, might now be offering something less tasty. So you wouldn't want the two accounts to be forever locked together. You need the option of moving one while leaving the original unchanged.

Baldur

Rollinghome wrote: »

The difficulty might be some that offered the best fixed-rate deals earlier, such as Yorkshire BS, might now be offering something less tasty. So you wouldn't want the two accounts to be forever locked together. You need the option of moving one while leaving the original unchanged.

You have that option as soon as the next tax year begins, as partial transfers of previous tax year's/years' ISAs are permitted - it's only the current tax year's ISA which must be transferred whole.