2012 S&S ISA question

fimonkey

I opened an S&S ISA with L&G and put in £3k. Can I leave it there and open another ISA this year with H&L? Or do I have to transfer my ISA frmo L&G to them too?

Thanks

CLAPTON

when did you open the L&G ISA?

theoretica

And do you want to open the H&L ISA this financial year or this calendar year?

fimonkey

Talking about financial years. I opened the L&G ISA in June 2010. I want to open the H&L ISA on the 5th April 2011.

Thanks

blueberrypie

You can open the H&L one on April 6th. The tax year runs from April 6th to April 5th.

fimonkey

blueberrypie wrote: »

You can open the H&L one on April 6th. The tax year runs from April 6th to April 5th.

And leave the L&G one as it is? Or do I have to transfer it?

If the former, does that mean I can no longer add any money to it in the future? (I am no where near my limit of £10K for tax year 2010/11)

blueberrypie

You can leave the old one if you want, or transfer it.

You can only add new funds to one in each tax year, so if you're putting any of your 2011/12 allowance into the H&L one, you can't also fund the L&G one during 2011/12.

Any remaining allowance for the tax year is lost when the tax year ends. Anything you contribute after April 5th comes out of your 2011/12 allowance.

AlbertoBalsam

Hi guys,

I'm a basis rate tax payer and I've came accross a first homebuyer regular saving account from santander which pays 5% interest. The market leading cash isa is 3.5% with santander for existing customers.

In this instance do I benefit more taking out the savings account or the isa?

david78

After tax 5% is worth 4% (rate after tax = 0.8 * rate before tax). This is higher than the 3.5% you get with their ISA.

However, you only get 5% by making regular payments. Whereas you can make a lump sum payment into the ISA. If you can only make regular payments, open the regular savings account, but if you can afford to make lump sum payments open the ISA.

spikyone

david78 wrote: »

However, you only get 5% by making regular payments. Whereas you can make a lump sum payment into the ISA. If you can only make regular payments, open the regular savings account, but if you can afford to make lump sum payments open the ISA.

I'd qualify that - if you can afford to make lump sum payments, open the ISA as well as the FHS. Pay in what you can to the FHS, and put anything you hvae left over into the ISA.
In fact if you have a lot of money to pay in, it may well be worth just dumping it in the FHS in one go - all that happens is you get little/no interest for that month, so if you only did it once in a year you'd still (just) beat the ISA's interest

psychic_teabag

AlbertoBalsam wrote: »

Hi guys,

I'm a basis rate tax payer and I've came accross a first homebuyer regular saving account from santander which pays 5% interest. The market leading cash isa is 3.5% with santander for existing customers.

In this instance do I benefit more taking out the savings account or the isa?

Depends how you define "benefit", and how much you will be saving relative to the ISA allowance.

In the short to medium term, you should end up with more interest from the FHS account.

But if you are saving for the long term, you might lose out if you don't take full advantage of your ISA allowances while they are available. The premium rate on the FHS may not last forever, but (hopefully) the tax-free status on ISA money will be forever. So if tax rates go up in the future, or you become a higher-rate taxpayer (because your salary goes up or because the threshold goes down) you might lose out by not having stashed away so much in tax-free accounts.

But if the total you will be saving amounts to less than, say, a couple of year's of ISA allowance, it wouldn't be that hard to move it from FHS into ISA's later.