Quick ISA question 30 December 2012 at 2:15PM in Savings & investments 7 replies 579 views

marky_john

Hi all

I opened a Santander ISA in August this year (last year if you're reading this after Tuesday) and will save the maximum by the end of April 2013.

Question is, you can save £5640 per year. Is this per financial year or per year from when the ISA was opened? I'm unsure whether I will be able to continue saving into my ISA from April to August.

Linton

Tax year - ends 5th April. After then you will need to set up a new one for 2013/2014, the limit will increase to £5760.

Yorkie1

It's per tax year (6 April - 5 April).

From next April the amount you can save into the ISA goes up to £5760.

Edit: snap!

marky_john

Thanks both. As I thought.

pqrdef

Linton wrote: »

Tax year - ends 5th April. After then you will need to set up a new one for 2013/2014, the limit will increase to £5760.

No need to start a new one. The counter on the existing ISA resets on 6th April.

Transfer to another later (or sooner) if you see a better deal - unlikely at present.

Chrishazle

Why limit yourself to a cash ISA - you can put over £11k pa into a S&S ISA and invest the money in shares paying 5% dividend with the opportunity for capital gain as well!

Mirno

Chrishazle wrote: »

Why limit yourself to a cash ISA - you can put over £11k pa into a S&S ISA and invest the money in shares paying 5% dividend with the opportunity for capital gain as well!

It's not an either or situation - you can put 5640 into a cash ISA, and a further 5640 into the S&S ISA (although you are responsible in this situation to ensure you don't go over your limit - if it's just the one account the bank should check for you).

Obviously there are other concerns with investment and it may not be the correct course of action for the OP. I put money into both as I want an emergency fund - for which cash is always best.
Remember the value of your investment may go down as well as up!

Thanks,

Mirno

chris_m

Linton wrote: »

Tax year - ends 5th April. After then you will need to set up a new one for 2013/2014, the limit will increase to £5760.

Why set up a new one? You can start contributing to a maxed-out ISA again once you're into a new financial year. Each financial year has an allowance and once one year has ended that's it, you can start again.

The only reason I can think of for opening a new ISA in the next financial year is if you find one paying a better interest rate. If that is the case, do NOT take the cash out from this year's one to pay it into the new one, because that will eat up next year's allowance - provided the new one accepts transfers you can transfer from the old ISA to the new one but must follow the correct process to ensure that the funds remain ISA-able.