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Flexible Mortgage PEP/ISA

Glambe
Posts: 13 Forumite
Hi all,
Ive had a flexible mortgage ISA/PEP with critical life cover with L&G which was to pay off £53000 of my mortgage at term. However it has severely underpaid and only has 6 years left to mature. Its current value is only 24000. As it happens I've managed to make up the shortfall by overpaying my mortgage over the last 10 years.
I only pay £78 per month and not all of that goes into the ISA side of things.
Now, I want to open a Stocks and Shares ISA but I understand that I cannot open one if I already have the Mortgage PEP/ISA with L&G and because its also in joint names with my wife neither can she.
Can someone advise as to what I can/cannot do. Can I open a S&S ISA with another company or not..? Maybe I need to seek independent advice?
Gary
Ive had a flexible mortgage ISA/PEP with critical life cover with L&G which was to pay off £53000 of my mortgage at term. However it has severely underpaid and only has 6 years left to mature. Its current value is only 24000. As it happens I've managed to make up the shortfall by overpaying my mortgage over the last 10 years.
I only pay £78 per month and not all of that goes into the ISA side of things.
Now, I want to open a Stocks and Shares ISA but I understand that I cannot open one if I already have the Mortgage PEP/ISA with L&G and because its also in joint names with my wife neither can she.
Can someone advise as to what I can/cannot do. Can I open a S&S ISA with another company or not..? Maybe I need to seek independent advice?
Gary
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Comments
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Now, I want to open a Stocks and Shares ISA but I understand that I cannot open one if I already have the Mortgage PEP/ISA with L&G and because its also in joint names with my wife neither can she.
Your existing account can't be an ISA as ISAs cannot be held in joint names. May be you both have your own ISAs? If you post the exact name of the product you have, someone might be able to comment further.
In any case, any adult (who is resident in the UK for tax purposes) can open a new S&S ISA every tax year if they so wish BUT you must not pay into more than one ISA of the same type in the same tax year.0 -
Its called L&G Flexible Mortgage Plan - PEP/ISA
Thanks for your reply. The mortgage plan is in both names but we have separate holdings of the two funds in it which are called Mortgage ISA.
L&G UK Index R acc and
L&G Worldwide E acc
We also pay guaranteed life cover and terminal illness payments in our monthly payments...0 -
Update on above. Ive been in touch with L&G about the appalling performance of the flexible mortgage isa plan. They tell me that because of the nature of the plan I cannot pay lump sums into the isa side of things. I really think that this is a 'useless' waste of time as I cannot open another s&s isa with anyone else whilst holding this flexible isa mortgage plan. As Ive already overpaid my mortgage and dont really need to make up the shortfall they advise that I could stop paying the life assurance side and in which case the plan will revert to an isa in both our names. I would be able to make lump sums and add other l&g units to it .
Can someone tell me that if I did this and then transferred the isa to a new provider how exactly is that done. Would I have to sell and rebuy into the new isa..?0 -
I could stop paying the life assurance side and in which case the plan will revert to an isa in both our names. I would be able to make lump sums and add other l&g units to it .
Can someone tell me that if I did this and then transferred the isa to a new provider how exactly is that done. Would I have to sell and rebuy into the new isa..?
The ISA would not be in both your names, as posted above an ISA is only in one persons name so presumably it must be either split in some way or only in one name. It would probably help if you check exactly how it is held which will affect how you proceed and if you need to move 1 ISA or two.
You contact the new provider and ask them to arrange the transfer. You should be able to transfer as funds rather than cash so you won't be out of the market.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Come across this "product" a number of times. It is just ISA and life cover individually packaged to give the impression of one product. Easily sorted by transferring the ISA out and putting in place replacement life cover (if it is still needed).I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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Thanks for replying jimjames and dunstonh. They state that the mortgage plan would just revert to a normal isa. As Dunstonh says this fm plan is just an isa with life cover and terminal illness cover. There are 2 ISA's attached one in my name and one in my wifes. To address the shortfall I wanted to pay extra lump sums in to use as a normal isa but they wont allow me to do that. The only way is to remove the liefe cover and end the fm plan and it will then revert to 2 normal isa's. However, since it has performed so poorly I wont want to remain with them and will transfer but I guess that if i do that then that will mean selling the L&G shares and rebuying into a new trust/oeic which must cost. Or would I just be able to keep the l&g shares in a new isa wrapper. Not quite sure how all this works.
I did ask if I could keep the life insurance aspect with L&G but they state I would have to open a new policy. However, as I already have life cover Im not too fussed about that..0 -
To address the shortfall, rather than invest the amount, reduce the mortgage by paying it into that.However, since it has performed so poorly I wont want to remain with them and will transfer but I guess that if i do that then that will mean selling the L&G shares and rebuying into a new trust/oeic which must cost.
They havent performed poorly. They just havent hit the target growth rate that was set too high.
Switching ISAs can be cost neutral.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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