Adding to/transferring ISA

botchit

HI

This has probably been answered a million times already on this forum but please still help.

I have a cash ISA which I opened a couple of years ago, I have not moved or topped it up since I put the full £3600 in.

Having read the ISA advice pages I now know I need to move it but I want to top it up so please can someone answer this?

When is the best time to top it up or move it? I want to put quite a lot away whilst I am young enough. Can I increase by the maximum before april then move it and add the maximum again or would transferring it count as paying in the maximum. If I can afford it I want to put as much away as possbile so really I need to know which way will let me save the most?

McKneff

Open a new ISA now, (check that they accept transfers in) put some funds in it, then transfer your old ISA into it (The new ISA company must do this transfer for you. Put as much as you like in in this tax year (up to the limit) then just add again up to the limit for the next year. Simple as that really

Do you have a pension at all,

botchit

Thanks, I do have a pension.

I didn't realise it was that simple or that was the process. I used this site originally as I knew I had to save but not how to go about it and all I knew was an ISA was a way to do so.

I must have misread the information as I didn't think you could have 2 open, I didn't realise this meant that you could open one up whilst you set up a transfer.

So to make it clear, oVer the next week (not 10pm on a sunday) then, I should.

Top up current ISA - to the max allowed.

Set up a new ISA and get the new company to do the transfer, here is bit I don't understand. Even though it is before april can I also add money to the new ISA even though I have already used a years allownace (if that exists) topping up the old/current ISA?

Then finally top up the new ISA in April if I am able to do so.

Does that seem right?

blueberrypie

botchit wrote: »

I must have misread the information as I didn't think you could have 2 open,

A lot of people are confused by this.

There is no limit to the number of ISAs you can *have*. You are only allowed to *subscribe* (which means "put new money in") to one cash ISA per year. If you'd put money into a different ISA each year for the last five years, you'd *have* five ISAs right now. All within the rules.

So the ISA you currently have - the one you opened a couple of years ago - has absolutely no effect on what you can or cannot do now.

To maximise your returns now, you need to look at two things:
- the best place for the funds you have in your current ISA
- the best place for the funds you have available (but not in an ISA) now

Open the best-rate ISA that suits your needs, and put the non-ISA money you have now (what you were going to top up with) into that.

If it allows transfers-in, transfer the funds from your current ISA into it too. The new ISA provider will give you a form to fill in. Do *not* simply withdraw the money from your current ISA - by doing that, you would lose the tax-protection.

Often the best rates are found on ISAs that don't allow transfers-in. If the ISA you choose for your new funds is one of those, look for the best rate that *does* allow transfers-in, and transfer your current ISA funds into that. Again, use the official transfer process (form from new provider).

Remember that your 11-12 ISA allowance must be used by April 5th, 2012, and that from April 6th, 2012, you will have another allowance for the 12-13 tax year.

thenudeone

You don't need to to this bit:

McKneff wrote: »

put some funds in it,

An ISA can be opened with just a transfer if you wish, it is not essential to put any new money in.