Am I right to empty my ISA?

89rallye

Howdy all,

You will have to forgive me from the off I am completely ussless when it comes to finacial stuff although I have always been very careful with money and I am lucky enough to be in a good job living with very little overheads so I can put a fair bit away every month.

Anyway..

I currently have around £15,000 in an ISA with the HSBC, which has been making around £3.88 interest on average for probably the last two years.

I also have around £24,000 sat in an A&L Esaver2 account which makes around £33-£40 a month after its taxed.

I am thinking of moving the majority of money from my ISA into the esaver or maybe open up another savings account for it. Reading up on it though ISA's are the be all and end all but its not making any money so whats the point???

Sorry, like I said I just dont understand most of it :embarasse I can make money but I just dont what to do with it and how to make it work for me and grow.

Suggestions please

Loco

89rallye wrote: »

I currently have around £15,000 in an ISA with the HSBC, which has been making around £3.88 interest on average for probably the last two years.

Reading up on it though ISA's are the be all and end all but its not making any money so whats the point???

Transfer your ISA to one of the better paying ISA`s. A&L currently pay 3.5% and allow transfers in for example. You have to keep on top of things rather than let your money earn next to nothing interest like your HSBC one.

http://www.moneysavingexpert.com/savings/best-cash-isa#iproduct

glider3560

You can transfer your ISA to somewhere that pays a higher rate. First Direct have an account that pays 2.75% (about £400 per year on £15,000) which allows transfers in.

All you do is enter the details of your existing ISA on a transfer form (provided by the new bank) and they do the rest.

Withdrawing money from your ISA means you lose the tax-free benefit. You've simply just fallen into the trap of having a very poor paying ISA.

pressuredrop_2

ISAs are designed for long-term tax advantages. You are thinking short-term.

redpete

You can transfer money from one cash ISA to another - this means you do not lose that entitlement to tax-free returns that you have built up. Search for a cash ISA that allows transfer in (not all of them do) and gives a relatively decent return, e.g. 2.75% from First Direct..

When comparing interest rates on non-ISA accounts with ISAs remember that you will pay tax on most other accounts (you don't with ISAs) so the headline rate can be misleading.

You'll get better rates if you are prepared to lock the money away for a period.

Outside of ISAs there are other tax-free National Savings, currently RPI + 1%.

89rallye

Cheers guys and gals,

pressuredrop wrote: »

ISAs are designed for long-term tax advantages. You are thinking short-term.

Really I am looking short term as I am looking to move house with in the next two years and since I have no equity in my current house (bought at the wrong time and paid way too much) for me to upgrade to a larger property so to speak I have to do it with a bigger deposit.

I have fallen into the secuity of what I know with the HSBC, I know there taking me for a ride and its one of them where they were my first ever bank and I have always been with them (from probably 10-11 years old) - wrong I know, but I am here to sort it out

pressuredrop_2

ISAs pay about 3% at the moment. Tax on £15,000 = £90 ( basic rate ) per annum. So, £90 in your pocket.

ray123

Loco wrote: »

Transfer your ISA to one of the better paying ISA`s. A&L currently pay 3.5% and allow transfers in for example. You have to keep on top of things rather than let your money earn next to nothing interest like your HSBC one.

http://www.moneysavingexpert.com/savings/best-cash-isa#iproduct

Unfortunately, the A&L ISA Does NOT Allow transfers from previous years'.

GlasWolf

glider3560 wrote: »

All you do is enter the details of your existing ISA on a transfer form (provided by the new bank) and they do the rest.

Just want to stress this to the OP seeing as they are self-confessed "useless"! Don't withdraw the money from your ISA like a bank account, or you'll lose the tax-free status. Instead, set up the transfer when you apply for your new ISA, and the new bank will request the money to be transferred from the old bank. It shouldn't take any longer than a month(!).

zedyy

Loco wrote: »

Transfer your ISA to one of the better paying ISA`s. A&L currently pay 3.5% and allow transfers in for example. You have to keep on top of things rather than let your money earn next to nothing interest like your HSBC one.

http://www.moneysavingexpert.com/savings/best-cash-isa#iproduct

You cannot transfer in to this product.

At a glance features

• With our Flexible ISA you’ll never earn less than 3.50% AER tax free (variable) for 12 months
• Service your account online, over the telephone or in branch.
• Penalty free withdrawals.
• Cash ISA transfers in are not allowed.

http://www.alliance-leicester.co.uk/savings/flexible-isa.aspx