Confused about ISA - benefit of paying in at the end of the tax year?Savings account?

AliceBrownie

Is there any benefit to paying money in up to my full allowance now, less than a week before the new tax year, or would it really just be so that I can transfer it into a new ISA next year rather than paying it in?
Also, would there be any benefit to opening a high interest savings account (which, tbh, I think I'd end up with the same interest at the end) and then pay it into an ISA before the end of the next tax year, or would I be better off making payments into my ISA throughout the year? So confused!

Yorkie1

One thing to bear in mind is whether you're a higher rate taxpayer / likely to be so in the future. You can't roll over unused ISA allowances, so if you don't use it then you lose it.

If you're likely to want to shelter as much money as possible from tax, then using ISA allowances in full can be worthwhile in the long term even if the rates are poorer now.

That all being said, the new ISA rules from July will allow you to put up to c.£15K in cash, so if you're not going to be reaching that limit with your savings from now and next year combined, then it's of less importance.

Fwiw, I am putting money into the First Direct Regular Saver every month rather than an ISA, because even after tax the FDRS beats the interest-free ISA rates, and at the end of the 12 months with the FDRS I'll transfer the money to an ISA of some sort.

Archi_Bald

duplicate of https://forums.moneysavingexpert.com/discussion/4934763