Continue existing Nationwide Instant ISA Saver 1.50%

colsten

You can transfer all or parts of previous years' ISAs anytime you wish to anywhere you wish.


Given current/recent/potential interest rates. the question you should ask yourself is whether cash ISAs are indeed the best place to hold your money in.

Only you can answer that Q.

wheelz

Thanks Colsten. I guess I want to do something about my low interest ISAs first and then think about what can/should I do with any new savings. So need to move the older ISAs into a new one with a better interest rate first. One older ISA has been sitting in a low interest ISA for a few years so I feel that I'm getting things sorted.

jimjames

I can't see the point of moving between ISAs if you're then looking at better options. Surely worth doing the better option first rather than wasting time and money on interim steps.

bowlhead99

wheelz wrote: »

I know I know. I'm finding it easier this way and too complicated in relation to my tax return. Until I'm more experienced in my tax returns I'm just going to continue with ISAs as it's easier. Just need to do a few of years of tax returns so that I know how it all impacts.

Are you really saying you need 'practice' at doing tax returns for several years before you are willing to earn any taxable interest? What do you do with interest you earn at the moment, say on a current account or whatever?

How it affects your tax return is: you find the amount of interest you earned, and the tax that was deducted at source, on the statement which you get from the bank once a year. Then you write the amount in a box on your tax return. The tax return then tells you how much tax you owe. That's how difficult it is.

wheelz wrote: »

If it was that easy I would work it out myself in a few minutes, I'm a professional person it's just not my thing tax matters and returns.

If you are a basic rate taxpayer (generally, someone with income below about £42k a year) you pay 20% tax on interest you earn. If you're a higher rate taxpayer (generally, earning between £42k and £150k), you pay 40% tax on interest you earn. If you're an additional rate taxpayer (£150k+) you pay 45% tax on interest you earn. There are some funny marginal rates (e.g. between £100-£120k) which don't affect most people. If you earn under £15,600 you won't pay any tax on interest you earn at all - although that may not be relevant if you're a 'professional person' who is in work.

So, once you know roughly how much income you expect to have in a year, you know what tax rate you're on. For example 40% tax means every £100 you earn you pay £40 in tax, right...? Tax returns don't have to be 'your thing' to be able to do this calculation. It is one number multiplied by another.

So then look at the articles on this website or the thousands of forum threads and find out what accounts pay the best rates. Take off the tax and see what the after tax rate is.

For example, and without saying this is the best account for your circumstances, because there are loads out there: the Santander 123 current account pays 3% on balances up to £20k. So that's £30 on every £1000 in the account. If you are a 0% or 20% or 40% or 45% taxpayer, your net interest after you have done your taxes is going to be £30 or £24 or £18 or £16.50 on every £1000 in the account. By contrast, the net interest you earn in a 1.5% Nationwide ISA is £15 on every £1000 in the account.

wheelz wrote: »

Thanks Colsten. I guess I want to do something about my low interest ISAs first and then think about what can/should I do with any new savings. So need to move the older ISAs into a new one with a better interest rate first. One older ISA has been sitting in a low interest ISA for a few years so I feel that I'm getting things sorted.

If the end result is that you should have your money in an account somewhere other than a Nationwide ISA earning 1.5% (for example, the account I mentioned which pays 3%, or any one of a number of other banks' accounts paying 3% or 4% or 5%), then you may feel that you're getting things sorted by opening an account at Nationwide but if it is not the right place for your money, you are doing work for nothing and you are not getting things sorted.

If the older ISA has been there for a few years and not earning any significant interest, you are missing out on £15 a year per thousand pounds of savings, by not immediately moving it to Nationwide. That is 4p per day, per thousand pounds, by not moving it to Nationwide. That 4p, which you've been living without for years, is not going to change your life if you move it this week rather than next week.

If there's £20,000 in it, it's 80p a day which sounds like you should take action quite quickly. Still, if you can move it somewhere other than the Nationwide ISA and get more than 80p a day, why not take an extra weekend to think about it so you only have to move it once?

This may sound a bit blunt but if you are avoiding putting it somewhere that attracts tax because you are scared of writing the number in a box on a tax return at the moment, and want to have a few years practice at writing numbers in boxes on tax returns first... it sounds like you are just putting your head in the sand. Maybe 'baby steps' of opening a better ISA is better than nothing, but perhaps it is time to, metaphorically, 'grow up'.

missile

Wow, that was harsh.

wheelz

I generally find people helpful on here but there is no need to talk to me in a condescending way. My old ISAs are not leaving ISA status as I believe you are suggesting. I'm going to consolidate them as Nationwide have advised then put them in a new ISA. Then there is the question of what to do with new savings, I've come to the conclusion that I need to meet up with a friend who knows about this.

I can't even remember from last year's tax return whether I'm a basic rate payer or not. My salary is definitely under the £42,000 but I don't remember whether to add my income from my flat to it or not. And what amount as there were deductions. I filled in my tax return online and it was my first time I did not find the experience very self-explanatory. I did have help from a friend, but as it's not my thing I haven't stored the info so I can retrieve it from my brain. It's really boring stuff. Then I don't know the impact of say being a higher tax payer (which I'm not sure I am) on the amount that you can save without paying (extra) tax on it so that the higher interest rate becomes useless and I'm better off with an ISA. Anyway enough about boring stuff.

Archi_Bald

wheelz wrote: »

I can't even remember from last year's tax return whether I'm a basic rate payer or not.

Whether you are a BR tax payer or not is not determined by last year's tax return. It is determined by your total taxable income and by your allowances.

https://www.gov.uk/income-tax/find-out-if-you-need-to-pay-income-tax

intalex

Rodders53 wrote: »

Flexclusive ISAs are only for NEW subscriptions only... no transfers in allowed... even from other Nationwide ISAs...

I don't know if the Instant ISA referred to in the OP is still 1.5% but this http://www.nationwide.co.uk/~/media/MainSite/documents/products/savings/terms-and-conditions/P2764.PDF summarises the changes made recently by Nationwide.

Older products' rates can be accessed here: http://www.nationwide.co.uk/support/product-support/savings-and-isas

The Instant ISA Saver is showing a rate of 1.50% when I view it using my iPhone app.

I was hoping to wait for my maturing Santander ISA to be transferred to this Nationwide account to boost the balance, then I was going to transfer the entire balance to a Clydesdale 40 day notice ISA, but I've just seen on their web-site that they'll stop accepting ISA transfers after this Friday.

Options getting more and more limited.

colsten

The Flexclusive ISA does allow transfers in.

If you see 1.5 for the Instant Saver ISA, it might be that you still have Issue 1, which is no longer available to new applicants? Issue 2 is 1.25%.

retiree

colsten wrote: »

The Flexclusive ISA does allow transfers in.

If you see 1.5 for the Instant Saver ISA, it might be that you still have Issue 1, which is no longer available to new applicants? Issue 2 is 1.25%.

Issue 1 is not available to new applicants, but this does not necessarily mean that 2015/16 subscriptions cannot be added. Or does it?