Convert cash ISA to Stock & Shares ISA

BeardedMan

Hi All,

Over the years I have accumulated several thousand pounds in cash ISA's(held in high street banks and building societies).

With the current interest rates so low I was thinking of transferring part of the funds to a stocks & shares ISA (I currently have a TD waterhouse trading ISA a/c for 09/10) were I believe I will be able to generate greater returns than the 3-4% I am currently achieving.

Is this possible?

BeardedMan

Mikeyorks

BeardedMan wrote: »

With the current interest rates so low I was thinking of transferring part of the funds to a stocks & shares ISA ....................... Is this possible?

Yes you can do (cash ISA to S&S ISA) that ..... via transfer. But bear in mind you can't then reverse it.

GiraffeMan

In short

Q. How much can I transfer from my cash ISA to a stocks and shares ISA?

A. You can transfer some or all of the money you have saved in previous tax years without affecting your annual ISA investment allowance.
Savers are also able to transfer money saved in the current tax year. Such transfers must be the whole amount saved in that tax year in that cash ISA up to the day of the transfer.
These transfers are subject to the terms and conditions of your ISA providers.

cottager

It's been suggested by our IFA that we convert ALL our cash ISAs to S&S ISAs. I'm thinking this is not such a great idea ('balance' and all that), but am not averse to a partial conversion.

Between us we currently have S&S ISAs worth about £16k & £19k, and cash ISAs of about £14k & £20k. He'd be putting them on the Skandia platform.

Any thoughts please?

lisyloo

Bear in mind your IFA will probably get some commission from this.
I'm not saying it's bad advice, but thta you should bear in mind he/she has a vested interest.

You are likely to get a better return from S&S so bear in mind you ened to balance this up against liquidity.
Your S&S has to be regarded not as a short term insvestment.
What other emergencey funds do you have that are accessible?
How well insured are you for death, sickness, accident, redundancy etc.

There are two main issues here that I can see.
One is liquidity. You need to make sure you have enough readily avaialble funds in an emergency. This will be affected but savings and insurance and your living costs.
The second issue is what you called balance and I would call diversification.
It good to have a balance of assets e.g. property, s&S, shares, gold NSI certificates etc. to diversify your risk.

cash to S&S is one way, you can't go back, so think carefully about it and don't be pushed into it.

Havign said that cash savings are not performing well at the moment with inflation at 3.5%. Your cash savings are probably being devalued as we speak.
So you do need to consider alternatives.

No easy answer I'm afraid.
Perhaps you need to clarify with your IFA why he/she is advising this and make sure they have considered your overall attitude to risk, diversification of assets and liquidity and not just increasing their commission.

Mikeyorks

cottager wrote: »

Any thoughts please?

As a consequence of poor cash interest rates ..... I have finished (as term deposits matured) with far more in Funds (ISA and freestanding) than I would normally have wished. But will certainly be using the April allowance (2 x £10.2k) to move £20.4k from freestanding funds and into the ISAs.

I also have several 4/5 year cash ISAs maturing over the next few weeks. But despite the downturn in rates (they mature at average 5.7%) ...... they will firmly stay as cash, in order to give a semblance of 'balance'.

Personally I'd be reserved at converting all your cash to S&S without fully understanding your IFAs reasoning. The previous post makes some very pertinent points

cottager

Thanks both. It's as I thought… I was agreeing all the way through your responses.

This is part of a larger 'grand plan' being formed for us, which I have some concerns about. It warrants a separate thread but I've been putting it off because there'd be such a long first post for you to wade through! In any case it could only be based on my interpretation of the IFA's general thoughts so far from initial meetings, so only the gist at the moment rather than the proper proposals – I don't have the detail necessary to look at the sort of ins and outs which lisyloo rightly points out.

It involves everything – our pensions, ISAs of both flavours, shares, and cash savings – but the general drift already concerns me enough to be worried, frankly; more on OH's behalf than mine, as he's the priority and the main reason for changing IFAs. He's self-employed and was hoping to retire last autumn: it didn't/couldn't happen as his pensions, already only modest, had gone through the floor. But he's desperate to finish as soon as he can, and so this is the main thrust of the master plan for the new IFA. My own 'affairs' are rather secondary to this at the moment and can wait, but there are obviously things which affect/involve us both.

Sorry for hijacking your thread BM, but it just gave me the chance to ask about one aspect of the current 'upheaval'. But you're quite right lisyloo and MY: it needs to be looked at in the round. I'll work on putting something together and attempt to keep it in reasonable check lengthwise (not my strong suit!). I could paste in your responses, and carry on from there.

My thanks meanwhile.

lisyloo

Well done for getting it all sorted.
Too many people neglect this.

But if your not happy with your IFA, then get another one.
I know it takes time, but this is important.

We have our advisors via my husbands company pension.
They get some commission from us, but they have a much bigger vested interest in keeping the whole account happy, so they wouldn't risk hacking us off for a bit of commission.
Do you have advisors connected with your company pension at all?