New account needed for Mum

*Rainbow*Warrior*

Bit of advice needed please? My Mum has asked me to find an ISA account for her which has a better rate than her existing Halifax one. I've seen Halifax are offering around 3% on ISAs but my Mum's is paying much less than this and I don't know if they will allow her to transfer to the better rate, as I guess it's there to attract new customers.

Anyway, I've found a few around the 3% mark but it's just occurred to me, surely she doesn't NEED an ISA anyway? I'll check with her, but I'm sure she's not a tax payer. She's elderly and disabled, living on her pension and disability benefit. She has a few hundred in this Halifax ISA.

Is there any harm to be done from closing that and just moving to a standard savings account with a better rate (IF we can find one, that is!).

I know you should never take money out of an ISA as it loses its tax free status, but does it really matter in this case?

Lokolo

The Halifax one can be upgraded online to the 3%

http://www.halifax.co.uk/isaupgrade

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But yes if she isn't a taxpayer an ISA isn't necessary unless the ISA gives a better gross rate than the savings account gross rate.

opinions4u

*Rainbow*Warrior* wrote: »

Bit of advice needed please? My Mum has asked me to find an ISA account for her which has a better rate than her existing Halifax one. I've seen Halifax are offering around 3% on ISAs but my Mum's is paying much less than this and I don't know if they will allow her to transfer to the better rate, as I guess it's there to attract new customers.

Halifax ISA Promise is very clear:

All cash ISAs will be available to all customers, new and existing.

Anyway, I've found a few around the 3% mark but it's just occurred to me, surely she doesn't NEED an ISA anyway? I'll check with her, but I'm sure she's not a tax payer. She's elderly and disabled, living on her pension and disability benefit. She has a few hundred in this Halifax ISA.

If she's a non taxpayer then there may be times that she's better off with a "normal" savings account. At present there aren't many easy access accounts paying more than 3.00% though.

Is there any harm to be done from closing that and just moving to a standard savings account with a better rate (IF we can find one, that is!).

Loss of tax free allowance in the future, although it sounds as though this is an unlikely scenario.

cing0

You can move money out of an ISA if you want but depending on how much you have, it may take years to get it re-wrapped tax free.
I am not recommending this at the moment as for about a year, instant access ISA's have been paying better rates than taxable instant access savings accounts.
Probably best to put £5k in a Santander Flexible ISA issue 3 (or The AA online) and the rest manager transfer into Halifax direct ISA issue 4 (if your after good interest rates).