What do I do with my existing ISA?

Hadrian

I have an existing ISA (2010/2011). Should I leave it where it is? (The interest rate after Apr 6th then plummets to almost zero).
I want to take out another ISA for 2011/2012. What should I do? Use the old 2010/11 money to subscribe to this 2011/12 ISA?
I have tried for ages to get a simple answer to this, can anyone help? :mad:

Lokolo_2

Hadrian wrote: »

I have an existing ISA (2010/2011). Should I leave it where it is? (The interest rate after Apr 6th then plummets to almost zero).
I want to take out another ISA for 2011/2012. What should I do? Use the old 2010/11 money to subscribe to this 2011/12 ISA?
I have tried for ages to get a simple answer to this, can anyone help? :mad:

Of course we can help :j

So you have an existing ISA, which the rate will drop on April 6th...now is the time to be looking around at other ISA providers options, seeing which offer the best interest rate and accept "transfers in" Halifax have one such ISA offering 3%

What rate are you getting now? It may be best for you to transfer close to when the rate drops as the transfer process can take its time.

By all means, DO NOT withdraw the money from the ISA and put it into a new one for 2011/12, use the transfer facility just to move it to a better paying rate.

This will mean that in 2011/12 you can still open another ISA and contribute "New" money up to next tax year's ISA allowance of £5340, as well as having your previous years ISA with another provider to get a good interest rate :beer:

Hadrian

aaronmanz wrote: »

Of course we can help :j

So you have an existing ISA, which the rate will drop on April 6th...now is the time to be looking around at other ISA providers options, seeing which offer the best interest rate and accept "transfers in" Halifax have one such ISA offering 3%

What rate are you getting now? It may be best for you to transfer close to when the rate drops as the transfer process can take its time.

By all means, DO NOT withdraw the money from the ISA and put it into a new one for 2011/12, use the transfer facility just to move it to a better paying rate.

This will mean that in 2011/12 you can still open another ISA and contribute "New" money up to next tax year's ISA allowance of £5340, as well as having your previous years ISA with another provider to get a good interest rate :beer:

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I'm sorry, I do not understand para's 3 / 4. Am I correct in thinking one can have 2+ ISA's running at the same time (with different banks or the same one) both earning the 'good' rate + no tax??

Current ISA with Barclays, one of best rates to date. If I decide to go for 2011/12 ISA with them how do I go about that? Am I correct in thinking if I leave it in with them the rate will drop?

Apologies for appearing dim but as I'm getting on a bit ISA's are all but a mystery to me. Thanks so far.

spikyone

Don't worry Hadrian, the language used with ISAs seems designed to confuse people.

Based on what you have said, the best course of action is:

Your old ISA - assuming the rate is going to drop (check with your provider), take out a new account that allows transfers in. As aaronmanz says, Halifax currently pays the highest rate. Ask the new provider to transfer the existing ISA across to them, but do not put any 'new' money in it. This process doesn't count as opening an ISA, and in theory you can do it several times a year if a better deal comes along.
You could, in theory, use this account for your 2011/12 allowance as well, but there are better rates available, so I don't recommend it.

Your 2011/12 allowance - take out an account that pays a high rate of interest, and only use this one for 'new' money (the £5340). This will be the one ISA that you open during that tax year.


You can hold as many ISAs at one time as you like, but you can only put 'new' money into one ISA in any particular tax year.
In reality you normally only need two cash ISAs - one with a good rate for new money, and one with a good rate for transferred money from previous years.

Lokolo_2

Apologies, I don't mean to confuse anyone.

In basic terms, transfering an ISA to a new provider (bank/BS) does NOT count towards your annual ISA allowance, so you can do this as many times as you like.

New money is money that is outside of what you have in your current ISA, New money going into an ISA counts towards your annual ISA limit, and new money often attracts higher rates of interest than money in your current ISA's

As Spikyone said, transfer your current ISA's to Halifax, but also open a new ISA for next years ISA allowance when the time comes, that way you are getting the highest interest rates possible

Hadrian

Many thanks. It's begining to be clearer to me now. Shall take your advice and hope for the best!