MSE golden rule

Layo909

On this page http://www.moneysavingexpert.com/savings/ISA-guide-savings-without-tax, the golden rule is 'never, ever, ever, ever withdraw money from a cash ISA'.

But elsewhere in the same article is says 'you can have full, instant access to your money without losing the tax benefits on the rest of your savings in the wrapper'.

Would somebody mind clearing up the rules on when money can and cannot be withdrawn from an ISA?

pqrdef

Layo909 wrote: »

On this page http://www.moneysavingexpert.com/savings/ISA-guide-savings-without-tax, the golden rule is 'never, ever, ever, ever withdraw money from a cash ISA'.

It's actually "my golden ISA transfers rule". It's telling you how not to go about moving funds from one ISA to another.

There's a separate argument that if you maximise your use of your ISA allowances then you maximise the amount of tax-free income you might enjoy when you retire - and if you withdraw money, you aren't maximising your use of your allowances. But that may or may not be something you want to worry about.

Layo909

So in one sentence the article says you can withdraw money, then in another sentence it says you can't withdraw money. I'm a bit confused by this.

torbrex

The article suggest that you don't withdraw your money, not can't, if you withdraw it, that portion of your tax-free allowance for the year is lost.

MoneySaverLog

It's talking about transfers.

NEVER withdraw money from one ISA to then put into another ISA yourself. If you do that you loose the tax benefit of that money.

IF however you TRANSFER the ISA using a transfer form from the new provider, you keep that years tax free allowance.

jamesd

What it really says is 'Yet as long as you abide by my golden ISA transfers rule, it should go smoothly: "Never, ever, ever, ever withdraw money from a cash ISA!
You'll immediately lose all the tax benefits." Instead speak to the new provider and fill out a transfer form'.

So when transferring, use a transfer form instead of taking the money out and paying it in to the new place.

When taking money out to use it for something else, not a transfer to another ISA, just take it out.