Transferring cash isa to stocks n shares

tabouleh

I have used this year's isa allowance in a cash isa, but now I think I want to move some to isa stocks n shares (I've noticed Santander's brought in 4 x as much interest last yr than cash isa). Am I allowed to do this? It's this year's isa money (not previous years) and I want to move some (not all) from HSBC to Santander.

Thanks in advance for any help

Btw, to anyone tempted by hsbc loyalty cash isa: no sooner had I opened one, I received a letter saying the interest rate will decrease in July :mad:

jimjames

Which Santander s&s ISA pays interest?

colsten

If you want to transfer from an ISA you made a deposit into this year, you must transfer the entire deposit for the year (HMRC rules).

This might mean you can't do what you want to do.

An S&S ISA with Santander might not be a smart idea, in any case, as they are almost certainly a lot more expensive than any of the fund supermarkets. Santander are awfully coy about their charges, which should put anyone off immediately.

dunstonh

I've noticed Santander's brought in 4 x as much interest last yr than cash isa

The only interest paying S&S ISA they have would be a corporate bond fund. However, you wouldnt go investing 100% in corp bonds.

Am I allowed to do this?

not sure. Are Santander still open for business on investments? Generically, you can do it but whether you can do it with Santander and whether it is suitable is a different matter.

Using banks for investments is a bad idea. Typically expensive and low quality and too high failure rate on mis-sales (which are punished to a higher level nowadays).

masonic

tabouleh wrote: »

Btw, to anyone tempted by hsbc loyalty cash isa: no sooner had I opened one, I received a letter saying the interest rate will decrease in July :mad:

They could drop the rate to zero for all I care. I only opened mine for the £10 per month save together payments.

jimjames

dunstonh wrote: »

The only interest paying S&S ISA they have would be a corporate bond fund. However, you wouldnt go investing 100% in corp bonds.

My question was based on whether the Op really knew what they were buying and whether they understand that investment can go up and down. Comparison of one years return to a cash ISA isn't a great way to decide.

dunstonh

jimjames wrote: »

My question was based on whether the Op really knew what they were buying and whether they understand that investment can go up and down. Comparison of one years return to a cash ISA isn't a great way to decide.

To be honest, I knew exactly what you are doing. I was just piling in on top to emphasise your point even more.

tabouleh

Sorry, yes, no doubt it was wrong of me to apply the word, 'interest' in the case of a stocks n shares isa. I understand it can go up and down and indeed my mum's did go down in the first yr (2011); however, since then, it has risen year on year, and over the four years it has grown 25%, with an average growth of 6.2% per year. From Dec 2013 - Dec 2014, the growth was 7% - compare that to a cash isa with the best rates being around 2%. That's why I want to open one myself. ...Unless I have grossly misunderstood the figures, but each statement tells us the current value and their 'sales costs' are "already included in the plan and won't affect the return you get" [contract note].

I know Santander were in trouble recently for mis-selling products, but the only problem I had with them was a personal experience of an over-zealous saleswoman flogging the 123 account and never mentioning the monthly charge and the fact it needs you to pay for your groceries on a credit card!

jimjames

I'm not aware of any restriction on the 123 account that insists you pay for your groceries with a credit card.


I'd really strongly recommend you do some more reading to understand more what you are doing rather than jumping in with an investment because someone else has it.


A 1.5% annual fee may seem small but makes a massive difference long term to one of 0.1%. If you read carefully annual fees are not charged as part of the sales costs.


By all means invest but make sure you know what you are putting your money into. I've invested for nearly 20 years so don't get me know, I think more people should invest but if your investment drops 40% just after you put it in, would you panic?

Archi_Bald

tabouleh wrote: »

each statement tells us the current value and their 'sales costs' are "already included in the plan and won't affect the return you get" [contract note].

It would be a straight-forward lie that the Santander costs will not affect the return you get, as the return is reduced by Santander's costs.

You are right that S&S ISAs consistently outperform cash ISAs over a prolonged period of time (e.g. rolling 10-year period) although there is no guarantee that they will do so in future. This is the risk you take in return for probably getting a higher return in an S&S ISA.

Have you compared Santander's costs with the cost of other S&S ISA providers? The return figures you quote seem very much on the low side for the periods concerned, probably due to very high Santander costs. Although the low returns could also be a result of the actual investment, or a combination of the investments and the costs - - what funds/shares/bonds are the returns for?

There is a list of providers on http://monevator.com/compare-uk-cheapest-online-brokers/.The fact that Santander isn't even mentioned gives me reason to believe their costs are extraordinary.

tabouleh

I guess they mean the 'current value' they quote has already been docked to account for their costs.

Thank-you for the link - I will look through that. I guess the fact that Santander is on the high street makes me feel the whole esoteric world of investment is more accessible, but as you say it's not so good as others on offer. As Colsten says above, I would have to move the entire allowance I've invested this yr, so I am now thinking that I'll shelve the idea until Oct when my previous isa reaches the end of its fixed term and use some of those funds. So, I'll look into those links in the meantime. Thanks again.