Paid into 2 cash ISA's this year - what will happen?

sparkiemalarkie

I have just had a very interesting reply from Nationwide.
My question was :-
Hello, I have 2 cash ISA's with Nationwide and have added my full £15000 annual allowance for this year. I would like to transfer £1250 from my cash ISA to my regular saving ISA monthly to take advantage of the better interest rate. Am I able to do this without it being 'seen' as a withdrawal? I did this last month with £10 to see if the money would be accepted and it worked. I would just like some clarification about the rules for transferring ISA money between Nationwide ISA's.
Many thanks


My reply
Thank you for your message.
I can confirm you can transfer funds directly from your Web ISA to your Regular Saver ISA and this will not be classed as a withdrawal on your annual ISA allowance.


[FONT=Tahoma, Verdana]Our Regular Saver ISA is a passbook based account (passbook will not be generated if applied for online) designed for those who wish to save on a regular basis. The maximum you can save into the account per calendar month is £1,250.00, until the 1st of March 2015. After this date you can pay funds into this account until you reach your annual cash ISA allowance.
[/FONT]
Please be aware that on the 1st of April 2015 your funds will be transferred to an Instant ISA Saver or, if not available, the nearest equivalent instant access ISA.
If you need anything else please reply to this message or give our customer services a call 24/7 on 0800 302011, or if you’re abroad call us on +44 1793 656789.

Regards,

Josh Hadland
Customer Consultant, E-Contacts

colsten

sparkiemalarkie wrote: »

I can confirm you can transfer funds directly from your Web ISA to your Regular Saver ISA

this sounds good and seems the important bit of information

sparkiemalarkie wrote: »

and this will not be classed as a withdrawal on your annual ISA allowance.

this makes no sense at all as withdrawals have nothing to do with the annual ISA allowance. May be what he meant is that your ISA allowance this year is £15K. But if he meant that, he could have said that.

Just keep the email in a safe place until next tax year.

bri160356

colsten wrote: »

I think Archi is absolutely right, it is not complicated. Perhaps if you look at S&S ISAs, it will become clear that a single ISA provider can, perfectly legally, let you spread your allowance over several products.

In an S&S ISA, held with your chosen ISA platform, you could, in theory, buy tens of thousands of different shares and funds, all in the same year. In reality, people will usually just invest in a handful of funds and shares each year (their portfolio). But it is totally normal to hold more than just 1 fund or share. These S&S ISAs are the most popular because they offer the most flexibility.

There are also some packaged S&S ISAs, where you don't choose your own funds or shares, and instead just have the option of 1 fund. The Virgin S&S ISA is an example. These singleton S&S ISAs are generally bad performers and shunned by savvy investors.

The exact same principle applies to cash ISAs, and it is entirely down to the bank or building society whether they offer just 1, or several cash ISA accounts under the same ISA umbrella. They obviously can only offer their own savings accounts but they can of course offer several of them. Most of them only offer 1, or max 2 (a variable rate and a fixed rate one) each year, and most of them do not offer to manage more than one of their ISAs under the same umbrella. Nationwide do, and so do a couple of others that I can't remember now. It is all perfectly legal, regardless of what countless uninformed people in banks and building societies and even in the HMRC told you. It's also not generally much use to spread your ISA allowance across two or more savings accounts with the same ISA Manager - another reason why most of them don't even offer it.

The typical ISA saver won't need to know about all the theoretical possibilities. It is generally a lot easier if people just describe their circumstances and requirements, and ask the questions that they have about their own ISA. For most cash ISA investors, the simplest answer is that they can just put money into one ISA account, with one ISA provider. So what is your specific question?

Hi colsten, thanks for that.:)

I didn’t really have a specific question; my post #8 was merely my experience regarding the CASH ISA’s subscription rules. I didn’t mention S&S ISA’s at any point, neither did the OP in his thread starter and the Nationwide ISA general terms and conditions, that you posted, specifically only mentions cash ISA’s.

The point I was making in my post #10 is that it’s quite confusing for the likes of me, who ask advice of cash ISA ‘experts’ at Coventry BS, Virgin Money and HMRC only to be told by you that these ‘advisors’ are amongst the, quote, “countless uninformed people”; (I’m not saying you are wrong by the way!...... they may very well be ’uninformed’)

My wife has two cash ISA’s with Coventry B.Soc and was told that she could categorically not pay into both cash ISA’s this year. They said it was nothing to do with their in-house procedure but specifically to do with HMRC rules; i.e. paying into 2 separate cash ISA’s within the same tax year was illegal; they even stated, when I quoted it to them, that the Nationwide were completely wrong in allowing their investors to spread their annual subscriptions across 2 or more cash ISA’s under the Nationwide ‘umbrella’.

As for your assertion that it’s ‘not complicated’ then I completely agree. When someone works to a set of (ISA) rules and procedures that they believe to be correct then there is no perceived complication; irrespective of how the ‘rules’ are interpreted.

However, for the less well informed man on the street (i.e. me!) conflicting information can undermine ones confidence in the so-called ‘experts’.

colsten

bri160356 wrote: »

I didn’t mention S&S ISA’s at any point, neither did the OP in his thread starter and the Nationwide ISA general terms and conditions, that you posted, specifically only mentions cash ISA’s.

I did mention S&S ISAs to illustrate that is perfectly possible to spread your annual allowance across multiple "pots", and that it is down to the ISA Manager to decide whether they offer multiple pots or not. The same principle rules apply to cash ISAs, too.

bri160356 wrote: »

My wife has two cash ISA’s with Coventry B.Soc and was told that she could categorically not pay into both cash ISA’s this year. They said it was nothing to do with their in-house procedure but specifically to do with HMRC rules; i.e. paying into 2 separate cash ISA’s within the same tax year was illegal; they even stated, when I quoted it to them, that the Nationwide were completely wrong in allowing their investors to spread their annual subscriptions across 2 or more cash ISA’s under the Nationwide ‘umbrella’.

Like most cash ISA providers, the Coventry has obviously chosen not to allow their cash ISA customers to have more than one pot for their annual allowance. That is perfectly legal, as it is perfectly legal for Nationwide to offer their customers several pots. If the Coventry or anyone else is telling you any different, they are just plain wrong.

bri160356 wrote: »

However, for the less well informed man on the street (i.e. me!) conflicting information can undermine ones confidence in the so-called ‘experts’.

Unfortunately, many banks and Building Societies have staff who give their customers wrong information. It shouldn't happen but it does, and your experience with Coventry is an example for this.

ViolaLass

colsten wrote: »

this makes no sense at all as withdrawals have nothing to do with the annual ISA allowance. May be what he meant is that your ISA allowance this year is £15K. But if he meant that, he could have said that.

But they do. The NW email meant that if the OP transfers £1k between these two ISAs, it will not count as having withdrawn the £1k. Rather an important point, I'd have thought, since the OP has used their entire allowance this year.

le_loup

A copy and paste from their ISA page:

For new subscriptions only

Transfers from other ISAs into this account are not allowed. If you do want to transfer your ISA to Nationwide why not take a look at our Instant ISA Saver


curiouser and curiouser as Alice said!


Maybe NW have got themselves into the same pickle they did with their Flexclusive ISA version 1. Maybe when the use the term "other ISAs" they mean "other providers ISAs.
But sparki's reply from them is weird.

colsten

ViolaLass wrote: »

But they do. The NW email meant that if the OP transfers £1k between these two ISAs, it will not count as having withdrawn the £1k. Rather an important point, I'd have thought, since the OP has used their entire allowance this year.

Withdrawals do not have anything at all to do with your allowance. Not ever. The only thing that influences the remainder of your annual allowance is the amounts you deposit.

The OP has used up their £15K for this year. They can withdraw however much they like, and their allowance remains used up.

If the OP still had any of their allowance left for the year and made some withdrawals, they would still have the same amount of allowance left as before the withdrawal.

This is the same for everybody, and has always been the same. Withdrawals are not relevant to the ISA allowance or the reaminder of the ISA allowance.

Of course it is relevant for the OP whether moving money from their NW ISA A to their NW ISA B is treated as a withdrawal or an ISA transfer. But to say such a move "will not be classed as a withdrawal on your annual ISA allowance" makes absolutely zero sense. If he had said "will not be classed as a withdrawal" it would have made sense. And perhaps he meant to say that.

le_loup

le_loup wrote: »

A copy and paste from their ISA page:

and a quote from their full T&Cs:
"11. The account only accepts new ISA subscriptions. Transfers into the account from any other ISAs are not permitted"



Nowhere do they define Other ISAs


Where is Hoovolo (sp) when you need him?

sparkiemalarkie

Thank you for the replies.
I think that, sometime over the weekend, I will reply to the Nationwide response to make sure that I fully understand the rules.


How I understand this......

I have put 'new money', all of this years allowance, split between the Nationwide Web ISA issue 3 and Regular Savers ISA.

According to some of the replies these are just 2 'subsets' of the Nationwide Cash ISA.

It seems that we are allowed to dabble in as many 'subsets' in the Nationwide Cash ISA as we want.

Shifting money between these subsets is possibly seen as transferring across, rather than transferring in.

This freedom is peculiar to Nationwide and will not, necessarily happen with other Cash ISA providers.


I have just checked my statements with the £10 practice run between the 2 ISA accounts. Interestingly the wording has now changed (when, I don't know).

Originally the £10 was shown as a withdrawal on the statement it now shows as a Transfer to my Regular Savers account number. On the Regular Savers ISA it shows as a transfer from the Web ISA account number.

I have been given 2 completely opposite pieces of information from Nationwide staff. I would be daft to think that either of them were right. So, I need to check again.
I'm in favour of using the internal messaging system on the NW site so that I can keep a record of what was said.


Any suggestions on what needs to be asked in my next response?


sparkie

colsten

sparkiemalarkie wrote: »

According to some of the replies these are just 2 'subsets' of the Nationwide Cash ISA.

It seems that we are allowed to dabble in as many 'subsets' in the Nationwide Cash ISA as we want.

see the Nationwide T&Cs that I posted a link to in post #3. These override anything anyone says to the contrary, and confirm you can transfer between your Nationwide ISAs in principle.

I cannot see anything that specifically describes an "internal ISA transfer" in the T&Cs but feel that the words "...split your cash ISA allowance between all or any of our cash ISA products..." cover internal ISA transfers.

sparkiemalarkie wrote: »

Any suggestions on what needs to be asked in my next response?

Given that you have already deposited your full allowance, in full compliance with the Nationwide General ISA T&Cs discussed above, the only possible question could be over whether you are allowed to move funds from the Web ISA into the Reg Saver ISA. As the T&Cs of the Reg Saver one say " Transfers into the account from any other ISAs are not permitted".

You already got it in writing from Nationwide that you can do it - "I can confirm you can transfer funds directly from your Web ISA to your Regular Saver ISA ". Also, their system allows you to do it.