Last years ISA

LauraWxx

Hi all,

opened an ISA last year which I have recently withdrawn (all but about £13).

I would like to know what is the best thing to do with this ISA now, should i shut it or continue to use it as the account to build my savings back up....will it pay me interest / work like an isa this year or not?

It is with northern rock (think they were highest interest rate when i opened last year) but have no real attachment to them in terms of loyalty / wanting to keep it open...and they dont have an app for my phone (as all other accounts do making everything a lot easier!).

Advice would be appreciated!

McKneff

If you still want to save in an ISA, look around for one with a good rate, (see what your old one is paying first)

You can open one and save in it, and get the new provider to transfer your old £13 into it.
Never transfer money yourself though

And start saving.

LauraWxx

Ok thanks for advice.....can i ask why you say not to transfer the money myself though??

I took my money out as it was part of my deposit for a flat I am currently buying, but once moved in and finances more settled I will be splitting all spare money between saving and overpaying the mortgage!!

Thanks again :-)

xylophone

When you wish to transfer to another ISA provider, you must ask the new provider to arrange the transfer - do it yourself and your money loses the ISA status.

LauraWxx

oh ok....thanks for that...had no idea!!

psychic_teabag

For £13, it's probably not worth the fuss. Esp if you won't be paying more than £5k into an ISA this year anyway.

If you transfer it yourself, ie withdraw it from one ISA and pay it into another, it loses it's tax-freedom under last year's ISA, regains tax-freedom under this year's ISA, but counts towards this year's £5k allowance. If you do a proper transfer, it never leaves last year's tax protection, and so doesn't consume any of this year's allowance.

So it matters only if you cannot afford to lose £13 from this year's ISA allowance.

Note also that you can only transfer to an account which allows transfers : sometimes, there are accounts that are new-money only (no transfers) paying slightly higher rates.