ISA confusion

jewelly

I started putting money (the full amount) into an ISA in November 2008 with A & L. It was a good rate at the time and included a one year bonus. So the rate goes down from November 2009.
Should I cash it in when the interest has been credited and put it into the ISA I started in June this year with Barclays? I haven't managed to put anything further into this one since the £20 opening amount. I am over 50 so it won't matter that I go over the £3,600 limit for this year.
Am I correct? I am a bit confused. Thanks for any advice.

zzzLazyDaisy

You get a new ISA allowance each year, starting April 6th.

If you put a lump sum into an ISA one year, it counts as that year's ISA allowance, even if the ISA you put it into is fixed until sometime in the following tax year.

When the fix has expired you can move the money into another ISA provided that ISA provider accepts transfers in. But if you transfer the money in this way, it is still last year's money and doesn't affect your ISA allowance for this year.

If you 'cash it in' the money will then lose its ISA status. It then becomes 'new' money, and yes at that point you can put it into your current ISA. However, if there is any prospect of you being able to save more money into this years ISA before the end of this tax year (next April) then you may well be better off keeping last years ISA and transferring it, and using this year's ISA for this year's savings.

Lokolo

zzzLazyDaisy wrote: »

You get a new ISA allowance each year, starting April 5th.

April 6th....

jewelly

Thanks for your help Lazy. I'll look at transferring - just in case I do manage to save anything this year.

zzzLazyDaisy

Lokolo wrote: »

April 6th....

Yep, sorry, April 6th! Have amended my earlier post, thanks!