ISA Advice before Budget changes take hold

clairbear1000

Hi,

I am looking for some advice. By the end of this tax year I will have £11.5K in my ISA. Until yesterday I had been planning to transfer it into a new ISA and continue to save.

During the next tax year I will have an additional £20K+ to save. (Maturity of shares plus monthly salary savings)

I am a potential first time buyer and will be looking to buy April 2016

If I open a new ISA in April this year I wont be able to open the FTB ISA in Autumn but if I wait for that I will have to pay tax on my interest between April and then.

What is the right course of action or is it too early to say?

Any guidance is much appreciated, or ideas about alternatives...

westy22

I don't think that there has been any details yet as to whether the HTB ISA will be just another type of ISA like Cash ISAs and S&S ISAs and that you could use your £15k annual allowance split between them however you prefer.

I can't see that you would have to give up your £15,000 Cash ISA annual allowance in exchange for a £2,400 per annum HTB ISA (£3,400 in the first year).

clairbear1000

I think you are right its probably too early to say. I just hope that they give definitive advice before end of April 2015. Judging by what I read on Martin's FAQ on the HTB ISA it seemed like it was one or the other which would be fine next year when they introduce the tax free savings allowance, but not this year.

westy22

I am sure that GO said in his speech that although the HTB ISA would not be fully up and running until the Autumn that prospective FTBs would be able to start saving now i.e. the savings vehicle itself might be available sooner.

EDIT Quote: 'We’ll work with industry so it’s ready for this autumn and we’ll make sure you can start saving for it right now.'

Archi_Bald

Just put your next year's ISA money into one or two good interest paying current accounts until things are clearer. These accounts will be paying you more interest than an ISA anyway, and you can still put your money into an ISA until April 5 2016.

clairbear1000

Thanks guys, I didn't pick up on GO's message about saving now. I will wait a bit then.

@Archi Bald, I am super intrigued by these good interest paying current accounts. I've always discounted them as I have had a bad credit report. Still waiting for my default to drop off, I expect that needs to happen first to be accepted, also I have over 15 years history with Barclays, thought that would look better next year when i buy a house. Although I expect you are going to tell me I can have multiple current accounts to keep that history...

jimjames

clairbear1000 wrote: »

Thanks guys, I didn't pick up on GO's message about saving now. I will wait a bit then.

@Archi Bald, I am super intrigued by these good interest paying current accounts. I've always discounted them as I have had a bad credit report. Still waiting for my default to drop off, I expect that needs to happen first to be accepted, also I have over 15 years history with Barclays, thought that would look better next year when i buy a house. Although I expect you are going to tell me I can have multiple current accounts to keep that history...

If your credit report is so bad that you can't get another current account I'd doubt that they'd consider lending for a mortgage.

You can certainly have more than 1 current account.

clairbear1000

@Jimjames thanks for answering the question about multiple current accounts.

My report has 5 and a bit years of perfect and in a few months a default will drop off making it full clean history - so I have no major concerns about getting the mortgage next april as I will have plenty deposit via shares and savings.

I just want to manage my savings the best way until then. I hadn't considered the current account interest on savings route and was asking whether I should apply prior to the default dropping off and my report becoming perfect or not.