ISA help - please

darrenm28

I have a couple of queries:

1. can money saved in an ISA be used when means testing for benefits etc. The reason for asking is that I would prefer to put my money into an ISA rather than a pension. However, I'm wary that in saving for my old age I could leave myself exposed if I lose my job in the future and need to claim benefits or If I save over a certain amount into an ISA I may then lose out on child benefit.

2. I have around £7,500 in an ISA (Barclays tax haven) but dont even get £5 a month interest. This seems a really poor deal to me. Any ideas on where I can get the best deal from & can I arrange it online?

Baldur

Can't help on the benefits issue but you could certainly transfer your ISA from the dire 'Tax Haven' to a different provider that accepts transfers and pays a better rate of interest - just select a new provider and complete their ISA transfer form - see this post (scroll down for Cash ISAs which accept transfers, both variable & fixed rate).

darrenm28

Thanks - do you know what the fixed ISAs are?

Is the interest fixed if you dont withdraw for the period mentioned
(ie 2/3/4 years)?

Lokolo

darrenm28 wrote: »

Thanks - do you know what the fixed ISAs are?

Is the interest fixed if you dont withdraw for the period mentioned
(ie 2/3/4 years)?

The interest is fixed but you cannot withdraw.

darrenm28

Lokolo wrote: »

The interest is fixed but you cannot withdraw.

Thanks - any ideas how this works in relation to point 1 in my original question.

Can the government force me to cash this ISA in if I lost my job. To live off if my savings were over the means testing limit?

Baldur

darrenm28 wrote: »

Thanks - any ideas how this works in relation to point 1 in my original question.

Can the government force me to cash this ISA in if I lost my job. To live off if my savings were over the means testing limit?

See http://www.worksmart.org.uk/money/what_are_isas

If you ever need to claim means-tested benefits, money held in an ISA will count against the money you will receive.

Paul_Herring

darrenm28 wrote: »

Thanks - any ideas how this works in relation to point 1 in my original question.

Can the government force me to cash this ISA in if I lost my job. To live off if my savings were over the means testing limit?

They can't force you, but they will treat it as if you're able to until you actually do.

e.g. even if you borrow to avoid having to cash them in, you can't actually offset that debt against your savings to reduce your 'savings.'

As you allude to in your first post, this wouldn't be the case if the money was in a pension - it wouldn't even be considered as savings to begin with.

debbie42

Lokolo wrote: »

The interest is fixed but you cannot withdraw.

Generally speaking, but not always: this one pays 3% with instant access.
http://www.firstdirect.com/savings/cash-eisa-overview.shtml