"Temporary" S&S ISA for 13/14 and 14/15 50% allowance

Archi_Bald

Looks like a very limited platform. They do not offer any funds at all, which makes it close to totally unsuitable for a typical DIY investor.

dave875933

In answer to the original question, Halifax Sharedealing would seem to be the best bet. You'd need to double check this but last I looked it costs £12.50 per year for the ISA admin fee with no exit fees or account closure fees (if transferring out as cash).

You can hold funds as cash within a Halifax Stocks and Shares ISA, as long as you "intend" to invest them (as with all S&S Isas that permit you to hold cash). I think you would be breaking the rules in this case as you are just holding it with the intent to convert to a cash ISA in July, but how serious this is morally and how likely it is to be enforced is another matter.

One reasonably immediate moral consequence of this I see is that if alot of people start doing this it may well prompt Halifax et al to start clamping down (although how they prove the "intent" one way or another is a difficult one), which may unfairly affect those who are holding cash in S&S ISAs with the genuine intention to invest when market conditions are more favourable.

But as Halifax pay no interest on the cash held in a S&S ISA they would probably be making quite a profit so happy to let it continue unless HMRC pressure them.

That just made me think there is a further risk with this that HMRC could decide it was some kind of evasion and introduce penalties (but again they also would presumably have to prove the lack of intent to invest and not just that you changed your mind in July).

Contrary_clive

Svs do not appear to charge ISA management, exit or inactivity fees. They could be used to park the money until July. If you wanted to invest the funds then a dealing charge of £1 would be levied on any deals within the first 30 days. Outside of this period a £5.75 buy/sell charge would be applied.

intalex

Any other suggestions for a free/cheap S&S ISA to park some cash until 1st July?

I'm looking to sign up back-end of this week, so happy to explore as many options as possible, particularly ones that have clearly advertised charges as well as proven tolerance to parking cash for less than 90 days.

intalex

I plan to settle on the below option with Fidelity later this evening:-
https://www.fidelity.co.uk/investor/isa/isa-cash-park.page

No setup fees, no switching fees, and as long as you leave the cash in there without tapping into any deals, no "deal" fees! As far as I can see, there don't seem to be any maintenance fees (no mention of it on the web-site). On the phone they pretty much explained there are no fees, and actually it pays a tiny 0.1% interest the "balance" which I think may be paid net of 20% tax but that makes no difference anyway for 3 months.

Anyone out here know of or used this option before, and able to confirm/comment on whether this option would be as straightforward as it appears?

Thanks in advance!

innovate

intalex wrote: »

Anyone out here know of or used this option before, and able to confirm/comment on whether this option would be as straightforward as it appears?

Nobody "out here" will ever have used this option before because until July 1 2014 transfers from S&S ISAs to cash ISAs are not possible.

jimjames

intalex wrote: »

Anyone out here know of or used this option before, and able to confirm/comment on whether this option would be as straightforward as it appears?

You do realise it is specifically against Fidelity T&Cs to take out the ISA with no intention of using it to invest?

What would you do if they insist it must be invested by say 31 May or the ISA will be closed? You'd lose the allowance and not have gained any interest. You will probably also attract the 0.35% platform fee so it will cost you a net 0.25% for the time you park the cash.

I'm still no wiser why you'd do this, if you have so much cash that it's too much for the £45k ISA limit over next 3 years then either invest in S&S ISA and get better returns any way or keep it in a non ISA account with a better rate. The risk for an investment in a S&S ISA can be whatever you want, it doesn't have to all be in risky small company shares.

intalex

innovate, I meant to ask if anyone has used the cash park either for investing through Fidelity, or even to transfer later to another S&S ISA.

I do appreciate what you're saying jimjames, and after having heard much about the potentially better returns than savings, I would actually like to be able to use this ISA "deposit" in an appropriate investment rather than cash savings.

However, the art of investing does require some knowledge and experience with the markets/products/drivers, and therefore requires more time investment before one should jump into it.

At the moment, I would struggle to find time or focus to "learn" this art, but the budget changes around the potential to convert S&S into Cash does give me an opportunity to give myself some time to see if I can somehow get on board the investing ship, with an easy contingency benefit of getting more in the tax-free wrapper, even if I can't find the time to do so.

As far as non-ISA savings options go, all I can say is that I do not have any other better interest-earning options available to me currently, which is why I haven't really engaged much in the Cash ISA vs Taxable Current/Savings interest rates debate!

innovate

intalex, you are absolutely right, you need to learn about investing before you jump into it. For example, you need to be sure that the provider you choose actually lets you invest in what you want to invest in.

I would expect that someone who knows nothing about investments would ask how they can learn about investments, rather than throwing some cash at a platform.

The budget changes aren't really any reason at all to jump in head first. But you have done it now, so best of luck.

intalex

innovate, as I said, I don't have the time right now to learn the art, and the opportunity to get £5,760 into a tax-free wrapper runs out tonight.

If I do find my way around investing over the next couple of months, then I'm pretty sure I'll be able to find a good option or two to invest in with Fidelity, otherwise I'll transfer out to another S&S ISA.

While the funds stay in the ISA cash park, they are covered by usual FSCS regulations.

As far as I can see, it's not as "blind" a move after all, but if I'm missing something or if you can think of a better plan for my spare £5,760 then please do share.

I still have a couple of hours left to decide!