ISA novice question

rosienapper

Hi all.

I started saving in an ISA for the first time last year and have received a letter notifying me of the end of the promotional rate so obviously want to transfer to a new one. However...

...before I realised this was something I should be doing now, I paid in one payment after April 5th. Does this mean that I cannot now have pay into a different ISA for the rest of 2012 - 13?

Apologies for the stupid question - I'm new to this and can't seem to find a straight answer on the internet.

badger09

rosienapper wrote: »

Hi all.

I started saving in an ISA for the first time last year and have received a letter notifying me of the end of the promotional rate so obviously want to transfer to a new one. However...

...before I realised this was something I should be doing now, I paid in one payment after April 5th. Does this mean that I cannot now have pay into a different ISA for the rest of 2012 - 13?

Apologies for the stupid question - I'm new to this and can't seem to find a straight answer on the internet.

Its not a stupid question, everyone has to start somewhere .

If you have paid into your existing ISA on or since 6th April, then what you need to do is find an ISA with a better rate which accepts transfers in. Use that bank's transfer process and when the transfer has gone through, you can continue to pay into your 'new' ISA.

Who is your current ISA with?

rosienapper

Thanks for the quick reply!

Current ISA is with Halifax.

So is the rule, "you can only open one ISA per tax year" rather than, "you can only pay into one ISA per tax year?

ylesia

rosienapper wrote: »

Hi all.

I started saving in an ISA for the first time last year and have received a letter notifying me of the end of the promotional rate so obviously want to transfer to a new one. However...

...before I realised this was something I should be doing now, I paid in one payment after April 5th. Does this mean that I cannot now have pay into a different ISA for the rest of 2012 - 13?

Apologies for the stupid question - I'm new to this and can't seem to find a straight answer on the internet.

Just agreeing with what badger has said.

Not a stupid question - I think it is quite a common scenario that isn't that easy to find a straight answer to and that's why this message board is so good ( it was one of my first questions here as well)

ylesia

rosienapper wrote: »

Thanks for the quick reply!

Current ISA is with Halifax.

So is the rule, "you can only open one ISA per tax year" rather than, "you can only pay into one ISA per tax year?

You can open as many as you like but you need to keep your current year subscriptions together and only have one "active" ISA at a time.

For example:

Open Santander 2 year fix - transfer in £5000 of previous year money

Open Santander 1 year fix - transfer in £2000 of previous year money

Open Santander instant access - transfer all your current year subscriptions and continue to pay in once transfer is complete

I think some banks let you spread your allowance over more than one type of ISA they offer but the important this is can only have your current year subscriptions with one provider at a time.

Hope that made sense!

ylesia

Just noticed you are with Halifax, if you don't want hassle of moving you can just redesignate your ISA to their 3% one, can be done by a few clicks online.

Hubby has done that with his as we are probably going to use some of it for home improvements and can't be bothered with the hassle of moving for 0.3% for a few months

rosienapper

Thanks guys - I think that clears it up.

As far as I can make out, my best option is to open the Santander instant access ISA paying 3.3% (don't want to fix it as I may need to access it at some point in next 12 months).

I then just keep paying in and my allowance for this year is £100 down (the amount that already went in after 6th April).

Thanks again for all the advice!

rosienapper

ylesia wrote: »

Just noticed you are with Halifax, if you don't want hassle of moving you can just redesignate your ISA to their 3% one, can be done by a few clicks online.

Hubby has done that with his as we are probably going to use some of it for home improvements and can't be bothered with the hassle of moving for 0.3% for a few months

I did just look at that as saw it mentioned in another thread.

Is it much hassle to transfer to another bank? I anticipate saving for at least half this tax year before potentially needing to access the money. Is it worth it for the extra 0.3%?

badger09

rosienapper wrote: »

Thanks for the quick reply!

Current ISA is with Halifax.

So is the rule, "you can only open one ISA per tax year" rather than, "you can only pay into one ISA per tax year?

NO :eek:

You can open as many as you want but you can only pay current year subscription or 'new money' into one. If you've already paid into one this tax year, you can't open another and pay more 'new money' into that as well.

You could redesignate your Halifax ISA, transfer the lot to Santander Direct ISA (3.3%) or choose somewhere else.

Don't forget to use the new ISA provider forms though

ylesia

rosienapper wrote: »

I did just look at that as saw it mentioned in another thread.

Is it much hassle to transfer to another bank? I anticipate saving for at least half this tax year before potentially needing to access the money. Is it worth it for the extra 0.3%?

That's a loaded question! Most transfers go smoothly but there have been some horror stories - especially with Santander. All you have to do is apply online, print of a form and send it to them. I have just done this for the 1 year fix. That should be it (and hopefully will be) but you never know!

If you save the full £5640 for a year that you are looking at about £18 extra - obviously more if you have money from previous years.

Totally up to you, everyone had a different view on how much something is worth. For us, I thought that transferring one ISA to Santander was enough for now. Maybe if all goes smoothly then will transfer hubbys as well - one step at a time lol!

badger09

rosienapper wrote: »

I did just look at that as saw it mentioned in another thread.

Is it much hassle to transfer to another bank? I anticipate saving for at least half this tax year before potentially needing to access the money. Is it worth it for the extra 0.3%?

Probably easier to redesignate, as I understand you can do that online at Halifax. If you had the full £5640 saved for a whole year the difference between Santander 3.3% and Halifax 3% would be £16.92.

Up to you really