New tax year - ISA DD payments?

Skibunny40

Hi


In February, I started paying into a S&S ISA by DD every month (just £200 per month, I'm only finding my feet!).


I just realised that the April DD came out on 7th April, so does that mean I've started a new S&S ISA for 2015/2016, even though I haven't signed anything?


Sorry if that's a daft question - I just thought I'd get a letter or something from the company warning me what would happen over the new tax year!

jimjames

Yes it does. Your authority carries over each tax year unless you stop it.

If you read the DD that you signed it says something to that effect.

Skibunny40

Thanks for the prompt reply. I'm quite happy to have a "new" ISA but just worried in case I'd done something wrong!


So does that mean I should transfer the previous year's ISA into this new one (it's only £400) or does each year's ISA just sit separately? Does it make any difference to anything?


Sorry again for all the questions but if I can work out what I'm doing now, I'll feel more confident about putting more money into it as time goes on. (and this is after I've tried to read up about it!)

colsten

Your money will all be in the same account

Skibunny40

Great, thanks. Maybe this ISA lark is easier than I thought!

kidmugsy

I hope you've got your DD justifying an absurdly good interest rate at a suitable current account.

Skibunny40

Sorry kidmugsy, you've lost me... The DD comes out of my main current account, is that what you mean?

Sea_Shell

I know that for next tax year, we need to get something in the diary to maybe stop/suspend our automatic DD, so we get a chance to weigh up all our options once our 123 Cash ISA matures, rather than be 'stuck' with the S&S ISA we have on DD.

Anyone know roughly how much notice you usually need to stop DD?

badger09

Skibunny40 wrote: »

Thanks for the prompt reply. I'm quite happy to have a "new" ISA but just worried in case I'd done something wrong!


So does that mean I should transfer the previous year's ISA into this new one (it's only £400) or does each year's ISA just sit separately? Does it make any difference to anything?


Sorry again for all the questions but if I can work out what I'm doing now, I'll feel more confident about putting more money into it as time goes on. (and this is after I've tried to read up about it!)

Sounds to me as though you're more familiar with cash ISAs than S&S.

Leaving aside the arguments about whether cash ISAs still have any merit :cool:, you would normally not want to keep paying into a cash ISA year after year as the rate typically drops after a year.

An S&S ISA is simply a tax efficient 'wrapper' for whatever funds/shares/bonds etc you have invested in. If you are happy with the S&S ISA provider, and they carry what you want to invest in, you can keep paying into the same S&S ISA for many years.

There is no need to look for a new home for your S&S ISA 'wrapper' every year

Skibunny40

That's exactly it - I've only ever done cash ISA's in the past, and just assumed they'd be pretty much similar. Thanks!

Vortigern

Sea_Shell wrote: »

Anyone know roughly how much notice you usually need to stop DD?

Roughly 3 working days ahead of the next due date, if cancelling the DD via your bank, but why leave it so late?

Your DD goes out on a known date each month, so you could easily give almost a month's notice. You should first advise the S&S ISA provider that you wish to stop the monthly payments. Then you cancel the DD with your bank.