I made a mistake choosing my ISA, can I transfer to a new one?

Parm

Hi all,

I opened a two-year fixed Santander ISA back in July, with the intent of putting a set amount into it each month.

Completely my fault, I didn't realise that after the initial 14 days, Santander doesn't allow "subsequent additional deposits" to that particular account. Only realised when my monthly standing order was being automatically sent back.

As I only have a small amount in the account, I'm going to end up losing a good chunk of my yearly ISA allowance, so I'm looking for a way to solve the problem. My plan is to transfer the Santander ISA (sacrificing any interest) to a different account/provider. But can I do that, seeing as this one was opened in the current tax year?

Cutting a long story short, I want to move to an ISA where I can keep putting money in, but I'm not sure if I can?

Lokolo

Under subscription rules you are allowed to open another ISA with the same provider and continue to top up with the rest of your allowance. So you may be able to open another instant access ISA with Santander and put rest of allowance in there.

However, not all providers allow this.

Otherwise yes, you can transfer it out, forego any interest and maybe have a penalty and continue to top up there.

opinions4u

Lokolo wrote: »

Under subscription rules you are allowed to open another ISA with the same provider and continue to top up with the rest of your allowance. So you may be able to open another instant access ISA with Santander and put rest of allowance in there.

I'm not sure you can these days. You certainly used to be but I think they changed the rules somewhere. And I can't be bothered searching through thousands of HMRC documents to confirm it!

This is the third Santander specific case I've seen on here regarding the topping up of a fixed rate ISA.

While my own view is that the customer should check this before opening, and it is in the T&Cs and another summary document on their web site, there may be mileage in pursuing a complaint - all the way to the FOS if necessary.

I'm only aware of the Lloyds TSB FRISA that allows top-ups.

pqrdef

Lokolo wrote: »

However, not all providers allow this.

I think I'd say that almost all providers don't, though Nationwide do.

I believe HMRC rules say that an account is an account, though presumably a bank can get round that by saying that all of your ISAs are just pots within one ISA.

pqrdef

Parm wrote: »

My plan is to transfer the Santander ISA (sacrificing any interest)

Note that an "interest" penalty can be more interest than you'e accrued, so you get back less than you'e paid in.

psychic_teabag

Are you still within the cooling-off period for the account ?

Parm

psychic_teabag wrote: »

Are you still within the cooling-off period for the account ?

Afraid not, it was opened back in July.

innovate

Someone else in the same situation said Santander had offered them to change the ISA to their instant access one. Not sure whether they also offered to waive the penalty on the fixed term account, but it would certainly be worth talking to them about your options.

innovate

Or may be just accept where you are with the ISA, and put your money into a First Direct or Nationwide Regular Saver? If you are a basic rate taxpayer, they should be paying you more interest than your ISA does.

POPPYOSCAR

Lokolo wrote: »

Under subscription rules you are allowed to open another ISA with the same provider and continue to top up with the rest of your allowance. So you may be able to open another instant access ISA with Santander and put rest of allowance in there.

However, not all providers allow this.

Otherwise yes, you can transfer it out, forego any interest and maybe have a penalty and continue to top up there.

Are you sure about this?

Lokolo

POPPYOSCAR wrote: »

Are you sure about this?

Pretty sure as some people here have done it. (well that's assuming they're aren't lying !)

Obviously, as O4U says, they could have been changed.

I can't see anything in the documents saying you can't do it, but neither can I see that you can. Just for the sake of ISA managers, they have to declare the subscriptions, so I don't see why it's not possible.

Only complication would be is if you are transferring out current year subscriptions, you'd have to take from both ISAs as you cannot split between managers.