ISA Confusion

DrEvazan

Please can someone advise as I think I've misunderstood how many ISAs I can have.

I got an ISA last year and have been paying a set amount into it each month by direct debit.

Then, this April/May I decided to open another ISA. I have savings that I want to keep separate. So I'm still paying the direct debit in to last years ISA but now have a lump sum that I want to pay into this years. I now think that I can't do this. Is it right that you can only pay in to one? How does that work? Do I just cancelled the direct debit on last years and start paying in to this years?

Thanks for your help in advance.

Gromitt

You can place money into one ISA per tax year. So if you have deposited funds into an ISA after 6th April this year you can't deposit funds into another as well until next April.

What you could do is transfer last years ISA and then continue paying into it. You can do an indefinite amount of transfers per year.

However, you might want to look into non-ISA solutions such as current accounts as these can give more interest.

Eco_Miser

More precisely, you can only pay into one cash ISA each year. You can also pay into one S&S ISA each year.

As soon as you paid into your existing ISA after 6th April, it became this year's ISA as well. As Gromitt said , you can stop the direct debit and transfer this year's contributions (and last year's if you like) to a new provider and make further contributions there (subject to the T&Cs of the new ISA). But there are better places for £15k at the moment (unless you are already using them).

thenudeone

The best rates at the moment are on current accounts, not ISAs.

Now that the cash ISA allowance is shortly to be £15k pa, for most people the best thing is to get the highest rate possible and only think about moving it to an ISA once interest rates have risen enough to make the value of tax benefits worth it.

Unless you are lucky enough to expect to have £15k spare to save every year in the near future, you should still be able to get the benefits when they are worth it.