should I pull money out of my Isa?

Chivas69

My wife and I each have around £45000 in a hsbc loyalty Isa! We are Premier Account customers! From January 2016 the rates are dropping to 1.3%.
I am now thinking our money would be better off split over different interest paying current accounts!
My concern though is that we've spent years building up this tax free amount and obviously we'd be unable to put it all back into an Isa straight away!
The new £1000 tax alowance from April on current account earnings will be a grest benefit though!
Even splitting £60000 between three Santander 123 accounts would generate more interest than leaving it in the Isas
thanks for any advice!

redmalc

Chivas
We are both Premier account customers also but over the last few years we have withdrawn everything from HSBC because of the poor rates on offer.
I have been very surprised they have not taken our Premier status away but they have.

Chivas69

That was the other thing I was thinking about! They only gave us the Premier Account because we had so much money with them! I presumed if we now take it all out we will lose the Premier account? Thing is, it's only really been any good for the holiday insurance!

Stubod

Hi Chivas,
I also have ISAs that is "up" in April (2 yrs 2.3%), and I will probably take them out of the ISA wrapper if I can get a better rate in an "ordinary" account. I don't think the government want to encourage us to save at the moment as ISA rates are generally lower than "normal" rates, and the withdrawal of the NSDI index linked bonds. Seems a shame really, but with the increased annual amount you can now deposit and the £1000 interest tax free I am less concerned about moving money out of an ISA wrapper. If you are concerned about loosing the ISA wrapper and want a better return (land you are happy to take some risk, and are looking at longer term), you may want to consider S&S ISAS, particularly as there are less restrictions allowing you to switch between them.

will-he-payitoff

Yes and no, I would take it out of the isa but only open 1 123 account then spread the other 25-40k across other high interest current accounts. As the ISA limit is now above 15k it would only take you 1 year and 1 day to put it back into ISA's if and when the rates improve.

Chivas69

cheers
The other thing, if we did have 3 Santander accounts we'd still have £15000 each for some other high interest accounts or the other option I'm considering is the West Brom ISA at 1.55%!
I'm just wondering how all this savings tax is worked out if I have 5 or 6 accounts! How do they know when I've had my £1000 or do I have to declare it myself?

Yorkshire_Pud

Whatever used to be good about ISA's isn't good any more.

I now use an ISA just to fund other better paying accounts like the Nationwide Flexclusive Regular saver.

The 'fear' that I won't be able to replace the funds in an ISA is a fear no longer as ISA's are lamentably rubbish as a financial product.

If ISA's were launched today as a new product no one would bother would they?

YorkshireBoy

Chivas69 wrote: »

cheers
The other thing, if we did have 3 Santander accounts we'd still have £15000 each for some other high interest accounts or the other option I'm considering is the West Brom ISA at 1.55%!
I'm just wondering how all this savings tax is worked out if I have 5 or 6 accounts! How do they know when I've had my £1000 or do I have to declare it myself?

You'd declare it yourself, from your annual savings interest certificates. But with 3 Santander accounts you'd each still be under the £1K mark...just.

You only need 1 Santander account though if you've £90K between you. That's if you're prepared to open several high interest current accounts?...

TSB, £6K with 2 sole plus a joint
Nationwide, £7.5K with 2 sole and a joint
Club Lloyds, £15K with 2 sole and a joint
BoS Vantage, £30K with 3 sole each
Tesco, £12K with 2 sole each
Santander, £20K with 1 joint

That's a total of £90.5K, and will make just over £3K a year, meaning you'd each declare £1,500...so over £500 a year each better off in the first year.

Chivas69

Great info, thanks
I'd just have to set up all the direct debits to have the minimum monthly payments into each account!

YorkshireBoy

Chivas69 wrote: »

Great info, thanks
I'd just have to set up all the direct debits to have the minimum monthly payments into each account!

4 pairs of DDs are all that's required (3 on each Lloyds and 1 on Santander, with Santander not required to pay out). The funding can be via internal standing order on TSB, Lloyds, and BoS, but Santander and Nationwide require external funding (just cross-fire all the Nationwide transfers from the Santander hub). Tesco requires no monthly funding at all.

colsten

Chivas69 wrote: »

They only gave us the Premier Account because we had so much money with them!

Which of the benefits do you get with the Premier account do you actually use? What would happen if you didn't have them?