cash ISA decision

caiti

My building society wants to talk to me about moving my savings in my cash ISA currently earning just 0.06% interest.
But if I do this won't I lose the future benefit of tax-free savings the ISA gave?
I made the mistake of fixing my mortgage just before interest rates dropped. I don't want to switch and find rates go up.

Mr_K

If you move it outside an ISA it will lose its tax free status (not that it means much as you're only earning 0.06% !)

You're building society will only offer you another of their products. I'd avoid talking to them as you'll just get a salesman on commission who will be looking out for himself, not you. Best doing your own research and finding the best deal from all providers - you could start here:- http://www.moneysavingexpert.com/savings/best-cash-isa Some providers will let you transfer your existing cash isa.

Whats your mortgage got to do with your savings ?

KingL

Mr_K wrote: »

If you move it outside an ISA it will lose its tax free status

... just to fill that out a bit, as long as you use the ISA transfer process, you can keep the tax free status whether you move it to your existing or a new ISA provider. Just tell the new provider that you want to transfer your ISA and they will handle the rest (they may ask you for some account numbers first).

Funkyfreddy

caiti wrote: »

My building society wants to talk to me about moving my savings in my cash ISA currently earning just 0.06% interest.
But if I do this won't I lose the future benefit of tax-free savings the ISA gave?
...

..but you can transfer your existing and very low earning balance in your ISA to another ISA with either A) the same building society or any other ISA provider.

It will then continue to keep its "Tax Free Status"

If you withdraw your ISA savings then yes you would loose the Tax Free Status on the amount withdrawn.

FF

nilrem_2

caiti wrote: »

My building society wants to talk to me about moving my savings in my cash ISA currently earning just 0.06% interest.
But if I do this won't I lose the future benefit of tax-free savings the ISA gave?
I made the mistake of fixing my mortgage just before interest rates dropped. I don't want to switch and find rates go up.

Earning just 0.06%; you should definitely switch to another account or provider, as others have advised as long as you switch via transfer you will keep your tax free status.

I can confirm it is easy and trouble free to move your ISA having moved mine several times.

If you are prepared to fix for 2 or 3 years you can get up to 3.75% ATM, yes rates will increase in the future but it might be at least a year before we see any worthwhile increases and any extra you make in those 12 months will compensate you for any increases you might have had you waited.

(FWIW Nationwide are offering 3.75% for a 3 yr fix ATM which is what I am going for.)

hethmar

Be careful not to close the account or let them - dumbos at Barclays did this on one of my old accounts before moving it to another with them which effectively means I lost the ISA allowance for one year

juicyjude

Oh hethmar didnt they compensate you for that? Think the Financial Ombudsman would be interested to hear about that, you shouldnt have to miss out on your ISA allowance. Thats terrible!

KingL

was that recently? HMRC don't know who has opened or closed an ISA until the ISA Manager tells them so. If it was recent and you can find someone intelligent and empowered in Barclays who will acknowledge that it was just an internal error, Barclays could put it right without you losing any allowance.