New tax year, new ISA?

skillfulrovers

Hi there!
I'm just getting into all this ISA stuff, however I was wondering, do you need to open a new ISA every tax year if you wish to keep saving into them? I've got one ISA already with Barclays, I was just wondering if I could still pay into that ISA with the allowance restarting from 06 April? Or do I need to open a new ISA from that date?
Thanks!

Lokolo

You can do either but not both.

skillfulrovers

Cool, so I'm absolutely fine with just topping up the one original ISA all the time, and not even bothering getting a second? I'd rather keep it all in one and just add into it every year, much easier that way?!

edinburgher

Cool, so I'm absolutely fine with just topping up the one original ISA all the time, and not even bothering getting a second? I'd rather keep it all in one and just add into it every year, much easier that way?!

The only problem is that this assumes that Barclays will always offer a competitive interest rate (which may not be the case). Ideally speaking you want to open the ISA with the most competitive rate once a year - otherwise you'll be starting another thread in a couple of years about how you're furious about the fact that your initially competitive ISA now pays buttons!

skillfulrovers

Ahh, I'm not too sure, I can never really be bothered to have money here, there and everywhere with loads of banks, only for the sake of a few quid! I just wanna know if it is okay to keep paying into the same, single ISA year after year, bearing in mind the saving limits per year?! Thanks anyway, I do totally understand your point!

edinburgher

Ahh, I'm not too sure, I can never really be bothered to have money here, there and everywhere with loads of banks, only for the sake of a few quid!

I appreciate consolidating accounts where it's appropriate to do so, but it's a poor idea to try and keep things 'convenient' at the expense of gains. For example, you talk about 'year after year'. If your ISA is at 3% for the first year, but drops to 0.5% for the next 9 years, think how much money you'll lose compared to the minimal hassle of switching it once a year to the current market-leading ISA - it's a heck of a lot!

Also, you can transfer ISAs from previous years to providers that offer a better rate (and accept transfers). Even if you open a new account once a year and transfer your old accounts once a year, it's not a whole lot of admin - shouldn't take you more than an hour or so. In my opinion this is a small price to pay for maximising your returns, especially in the current environment where pretty much all savings accounts are losing money thanks to the 'wonders' of inflation.

Baldur

skillfulrovers wrote: »

Ahh, I'm not too sure, I can never really be bothered to have money here, there and everywhere with loads of banks, only for the sake of a few quid! I just wanna know if it is okay to keep paying into the same, single ISA year after year, bearing in mind the saving limits per year?! Thanks anyway, I do totally understand your point!

If your current Barclays ISA is the "Golden ISA Issue 2", its current rate is 2.06% if your 1% first-year bonus has dropped off - hardly competitive, when the new "Golden ISA Issue 3" offers 3.25% on new money.

This is why most people would be well-advised to transfer their old Barclay's ISAs to a more competitive provider at the end of the initial bonus period.

skillfulrovers

Cheers for the replies guys! I'll have a look at all this then at the end of 2011/2012 and see what's about then! Thinking about it, 3% or so does sound much better then 0.5%/buttons! Haha! Thanks again, appreciate it.