Please clarify my thinking - ISA's

Silaqui

Hi all,

I am about to start saving for the first time since I was a kid, and wanted to clear something up about ISA's. Is my thinking below correct....

I can open an ISA now, and pay in up to £5,100 before April 5th.

Even if I don't pay in that much, the ISA will still be closed on April 5th, the money already in it will remain tax free, but I will have to open a new one for the next tax year?

Thanks in advance and apologies if I sound a bit dim!

Silaqui

x

jem16

Silaqui wrote: »

I can open an ISA now, and pay in up to £5,100 before April 5th.

Correct.

Even if I don't pay in that much, the ISA will still be closed on April 5th, the money already in it will remain tax free, but I will have to open a new one for the next tax year?

No you can continue to subscribe ( pay into ) the current one if you want to and the rate is still good.

People often open a new ISA simply because the rates are usually better.

Silaqui

Ah ok I see - so in theory I could just open one now and carry on paying £5,100 into it every year, but in practice it's better to look for the best rate each year and open a new one if necessary...

Thanks very much for the reply!

Silaqui

jem16

Silaqui wrote: »

Ah ok I see - so in theory I could just open one now and carry on paying £5,100 into it every year,

Yes you could.

but in practice it's better to look for the best rate each year and open a new one if necessary...

The nature of any bank account I'm afraid. Often the rates drop and they hope the customer won't notice or can't be bothered to transfer.