ISA help, am sorry as this question has probably been asked already. 31 March 2011 at 11:04AM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 1 reply 629 views

Fur156

Hi all,

I currently have an isa paying a terrible rate with lloydstsb. I pay into this isa by direct debit.

If I wanted to transfer to a new provider, do I need to cancel my direct debit paying into my current isa before transfering into a new one ??? I ask because if my direct debit goes into my current isa, am I stuck with that isa for the coming financial year ??

I know I have left it very late to ask and that to many of you it may sound a little dim, but I'm being honest and I have read and re-read the info on MSE but am still confussed.

Thanks.

blueberrypie

Assuming the LTSB ISA is instant-access (i.e. you did not commit to having the money in there for a specific length of time):

Yes, cancel the direct debit. Do this now, so that nothing goes into the old ISA on or after April 6th. If you pay into the ISA on or after April 6th, it will be considered your ISA for the 2011/12 tax year. You could still transfer your funds elsewhere, but you would be limited to ISAs which allow transfers in (and often the best rates are on ISAs which don't).

You can transfer the funds to a new ISA, using the proper ISA transfer procedure (get a form from your new ISA provider).

You can, if you wish, set up a new regular payment (by direct debit or standing order) into a new ISA for 2011/12. It does not need to be the same one that you transfer the funds from the old ISA into.