ISA Advice Please

KorkyKat

Can somebody please give me some advice. I have read and re-read all the various articles on ISA's and they all seem the same - the magical roundabout of re-investing here and there but I can't find anything that is easily comprehensible about withdrawing my money and simply putting it into my current non ISA savings account.

I have three old ISA accounts with three different banks. I have not opened one this year. Each year I let them run on to the next year. Ergo it is old money.

What do I do about making a withdrawal. I find it bizarre that one bank should say: 'Oh you don't want to withdraw the money or you'll have problems?' It seems bloody pointless having savings if you can't get access to the money"!

I assume there would be no penalities for cashing in an old ISA?

Any advice will be appreciated.

Thank You

SomeUser

Contact the ISA provider - they'll tell you what you need to do. There will be no penalties unless you're invested in a fixed term investment product.

Archi_Bald

It might be easier if you detailed exactly how much money you had in what sort of ISA and how much of it you would like to withdraw when.

Generally speaking, the terms of your ISA apply, not any write-ups on any internet site (including this post of mine).

But, also generally speaking, you can withdraw as much as you like from any instant access ISA whenever you like, or from any matured fixed-term ISA.

Not so generally speaking: the terms of your account apply. If you have lost the T&Cs you agreed to on account opening, you can find them on your provider's website, or you can ask your provider for them.

KorkyKat wrote: »

I find it bizarre that one bank should say: 'Oh you don't want to withdraw the money or you'll have problems?'

Which bank said you will have problems when you tried to do what?

Heedtheadvice

As per Someuser and Archi Bald.

Most accounts that have a fixed term of 'higher interest' upon end of term roll over to some other ISA account (usually with lower interest rate) so inaction costs you. They are all still held within ISA rules (unless you have terminated them by. for example. withdrawing the savings or if there was a specific condition that the savings would go into a non isa account. That did happen to some very old Tessa/Pep accounts (I think) but is most unlikely.

Unless there are specific termination condition preventing you from closing them such as a fixed term that is still running, then you are free to withdraw any or all of your savings, if you need to, or start new ISAs as well as transferring the old ISAs into new cash savings investments or stocks and shares ISA.

There should be no downside to prevent you (if your bank says there is then tell them to be specific!) other than losing the tax free status given by an ISA.

Unless you need the savings then transfer to a better account could be your best option or one of the higher interest paying bank accounts that are currently available but do consider what your aim is first.

KorkyKat

Thank you for taking the tine to reply. It is appreciated.

All three are Cash Isa's One came with a Cash Card - Santander. The other two were One Year Fixed Rate bonds taken out three years ago. I would normally get a letter asking me if I wanted to extend it by another year.

I hope this additional information will help.

Thank You

Heedtheadvice

...so basically the advice already posted applies as the bonds will be outside of their term and ( with previous caveats) can see no reason you cannot access the Santander ISA

gkerr4

i guess internet advice is worth what you pay for it, but to my mind, unless you 'need' the money i'd be tempted to leave it alone.

the temptation might be that you have a non-isa paying slightly higher inters - but bear in mind that once you withdraw the ISA money, you can never again gain the "tax free status" it has currently.

While current interest rates are 2/10ths of F-all - they might always be - i'd hate to take out the ISA now to gain a fraction of a % only to regret it years later when you pay tax on saving that should (would) have been sheltered.

It might be worth consolidating your accounts into a single ISA though and this would allow you to review the interest rates applicable.

just my 2c

Archi_Bald

gkerr4 wrote: »

bear in mind that once you withdraw the ISA money, you can never again gain the "tax free status" it has currently.

That's not always true, and for most people, it won't matter a jot as most ISAs are worth less than £7,000 (according to published HMRC stats). With the £15K limit, most people would currently do better if they put their savings into the good current accounts. Later on, as and if cash ISA rates outperform current accounts again, they can put it all back into the ISA wrapper.

It's only the folks with larger ISAs who should keep their funds in ISA wrappers as they would lose the tax free status for good.

jimjames

gkerr4 wrote: »

i guess internet advice is worth what you pay for it, but to my mind, unless you 'need' the money i'd be tempted to leave it alone.

The downside of just leaving it alone is that is what the banks want you to do. Money from a 1 year fixed rate ISA that is 3 years old is very unlikely to have a decent interest rate.

So doing "something" is likely to be a far better option than doing nothing. What that something is really depends on the amounts the OP has in their account.

Intrepid2

KorkyKat wrote: »

Can somebody please give me some advice. I have read and re-read all the various articles on ISA's and they all seem the same - the magical roundabout of re-investing here and there but I can't find anything that is easily comprehensible about withdrawing my money and simply putting it into my current non ISA savings account.

I have three old ISA accounts with three different banks. I have not opened one this year. Each year I let them run on to the next year. Ergo it is old money.

What do I do about making a withdrawal. I find it bizarre that one bank should say: 'Oh you don't want to withdraw the money or you'll have problems?' It seems bloody pointless having savings if you can't get access to the money"!

I assume there would be no penalities for cashing in an old ISA?

Any advice will be appreciated.

Cash Isas are a waste of time unless you are considering to move these to Investment type Isas at some point in the future. They work better for higher and additional rate taxpayers as the tax saving on the interest becomes worthwhile. Have a laugh and calculate how much tax on the interest you are actually saving in monetary terms.

You should retain money in cash but if you are wanting a real return above inflation, cash Isas won't do it. Obviously I don't whether you have other investments as well as cash Isas.

There are some really good investment Isas out there, obviously with the more credible fund managers. You do normally need to keep these longer term but still have access if you desire. You can decide on a fund based on your attitude to risk. A decent cash is a would have returned about 22% compound over the last 5 years, whereas a good balanced investment Isa would have returned nearly 100%.

Archi_Bald

Intrepid2 wrote: »

There are some really good investment Isas out there, obviously with the more credible fund managers.

It is very rare that a fund manager offers an ISA, and buying direct from a fund manager is invariably not the cheapest option, anyway, even if they do offer it. But most good funds are available in investment ISAs available through platforms / discount brokers / whatever you call them.