Increased Isa allowance - NISA

proudgran

I know that I can increase my ISA savings to £15,000 next month and I would like to do this but only have enough cash in older ISAs which are now paying low interest. My current year ISA (Coventry), although having a good interest rate did not allow transfers from previous years otherwise I would have done that.
Normally, I know it would not make sense to take money out of an old ISA to put into a new one, but in this instance I can't see any reason why I shouldn't do it as the Coventry account pays a better rate.
I do not have cash saved anywhere else that I could move and I'm unlikely to have that sort of money from anywhere else this year. Can anyone advise please. Am I missing something?

jimjames

If you have under £15k then there is no reason why you can't remove money and put it into the best paying ISA you can find.

Having said that if you have under £15k then why are you bothering with ISAs at all now when you can get 5% on current accounts?

RickyC_IFSWP

proudgran wrote: »

I know that I can increase my ISA savings to £15,000 next month and I would like to do this but only have enough cash in older ISAs which are now paying low interest. My current year ISA (Coventry), although having a good interest rate did not allow transfers from previous years otherwise I would have done that.
Normally, I know it would not make sense to take money out of an old ISA to put into a new one, but in this instance I can't see any reason why I shouldn't do it as the Coventry account pays a better rate.
I do not have cash saved anywhere else that I could move and I'm unlikely to have that sort of money from anywhere else this year. Can anyone advise please. Am I missing something?

If you plan to take money out of your Cash ISA anyway, you'd be better off using the money for the current accounts with high interest rate promotions as others keep banging on about here. If it were me, right before the tax year ended, I would then put the total amount back in an ISA (including any interest you've received). I don't like missing out on allowances that could benefit me in the long-term.

proudgran

Thank you for your replies, I hadn't thought about using the money in a high interest bank account. I'll have a look at them.:)

Your_Hero

JimJames and Ricky are spot on here.

Normally it is not advisable to take out money of your ISAs, but as you have under £15k anyway, you could eventually just put that back into your ISA when rates improve.

badger09

proudgran wrote: »

Thank you for your replies, I hadn't thought about using the money in a high interest bank account. I'll have a look at them.:)

proudgran, are you a taxpayer?

If not, and if you are unlikely to become one in future, then forget cash ISAs completely.

Even if you are a taxpayer, the high interest paying current accounts (TSB Plus, Nationwide Flexdirect, Club Lloyds etc) will give you a much better return on your money.

pbolding

I am in a similar position to the OP - and I am a taxpayer - and I have been having a difference of opinion with Nationwide about what the rules say. I have been back to them three times because their version seems to differ from HMRC's.
I thought you could only pay into one cash ISA or NISA in any one tax year. They say you can pay into as many as you like up to the limit as long as they are with the same provider.
This is from their latest message to me. Can anyone else tell me who is right?
"To clarify you could hold a Flexclusive ISA and a Regular Saver ISA account with us and make credits to both accounts up to your annual ISA allowance of £15000 (as of 01 July) within the same financial year. Please note the Regular Saver ISA can only accept credits up to £1250 per month up to the annual ISA allowance.

Having reviewed the document you provided I can see the confusion may have been caused by the following sentence ''If you have paid into a Cash or Stocks and Shares ISA since 6 April 2014, you will not be able to open a further NISA of the same type before 6 April 2015.''

Please note this applies to new NISA accounts opened after 01 July however as you hold existing ISA accounts this would not apply."

westy22

Nationwide are slightly unusual in that they allow more than one ISA type per year, splitting the allowance between accounts. There are a couple of other providers who also offer multiple ISA accounts in a similar way.

Nationwide are correct in what they are telling you and it doesn't break HMRC rules apparently.

Eco_Miser

Technically, you only have one cash ISA with Nationwide, but it can be split across many sub-accounts of different types, similar to the way S&S ISAs work.

fifeken

There's a write up on this in Martin's weekly email of 4th June. It lists Nationwide and the other providers you can do this with.