ISA advice

nookey_bear

Hi - I currently pay £150/mth into a S&S ISA that I opened at the end of 2010. It has done and still does give me a very good return. The fund is relatively high risk hence good returns, and I have been advised to keep these payments going and possibly increase if possible. I doubt I will be able to do so for a while yet - young family pressures etc!

I am generally well clued up on ISAs but cant get my ahead around my situation. The more I look at it the more confused I get, so to save my sanity I'm turning for help!

The £150/mth payment takes up £1800 of my £15k allowance. So for this ISA period up to April, can I put up to £13,200 in another ISA? Does this have to be a new one, or can it be one that was opened in a previous ISA year?

And then from April onwards, again can I continue to put in £150/mth in to the S&S ISA and open another ISA?

I know I might be advised to simply increase my mthly payments into my current S&S ISA if the returns are so good - but I want to know what is possible within the rules.

I believe I can contribute to 2 ISA's at once, provided I dont exceed the £15k and one is cash and the other is S&S.

I'm sure someone will tell me which parts of the above are right and which are wrong

Archi_Bald

nookey_bear wrote: »

I believe I can contribute to 2 ISA's at once, provided I dont exceed the £15k and one is cash and the other is S&S.

Your understanding is correct.

Whether it makes sense to put money into a cash ISA is a different matter altogether.

bowlhead99

The returns generally on S&S since the end of 2010 have generally been pretty great when compared with the long term returns you could expect from the stock market. In other periods the return would be negative and if it is a high risk fund, very negative.

So, the other part of your ISA that was sitting in cash might fare much better than the S&S part, over some time periods.

Of course, if the other part of your ISA was not sitting in a cash ISA but in a high interest current account paying 3, 4, 5% gross, it might fare even better; Cash ISA rates are currently dire.

But you're right that if you are not using up all your ISA allowance in one type of ISA for a particular tax year you can put it into the other type. S&S is one type, Cash is the other type. But what you can't do is open a second S&S ISA with a different provider with the same tax year's money. Seems like your understanding is fine.

nookey_bear

Thanks Archi bald and bowlhead99. I thought my thoughts were right but wanted to double check.

I agree with your comments about dire rates on cash isas and that there are better performing regular current accounts out there. I have held a Santander 123 acct since they were introduced and constantly just tip over the 20k max so can't squeeze anymore benefit out of that.

So I will more than likely put any surplus income into the current S&S ISA and leave cash ISAs well alone. I do have a number of cash ISAs from previous years and will look to transfer some into higher rate cash ISAs and/or move them into the S&S ISA. My philosophy is to have a balanced portfolio of savings and investments