Multiple ISA questions

wildcath_20

Hi,

I have just opened a Cash ISA with Shepherds to take advantage of the £250 Quidco cashback. My first DD will go out on the 1st Feb and therefore in theory my cashback will become payable after my 3rd DD on the 1st April. This will work well as it means I can open a new ISA after the 5th April with Scottish Friendly and get more Quidco cashback.

However there is a chance that my cashback with Shepherds will be delayed and I would then have to make a 4th DD payment on the 1st May.

My questions is that if this happens would I be in a situation where I now cannot open a Scottish Friendly ISA because I have contributed to a different ISA in the new tax year?

Or will it not be a problem because I opened the Shepherds ISA in the previous tax year?

Thanks for any help

ColdIron

It's not when you opened the ISA, it's when you make contributions. You can only 'subscribe' (pay new money in) to one cash ISA in any tax year so if you paid money into one cash ISA next tax year you cannot pay into another. Sorry and all that

msallen

Are you sure the Shepherds ISA is a cash one? The only offer currently showing for £250 cb is an S&S one.

Are you sure there is no minimum term that you have keep contributing for to earn the cb?

jamei305

From the T&C:

Shepherds Friendly will not start to process your cashback until 90 days after the first monthly payment is made, with confirmation of cashback around 2 months afterwards.
Cashback will not be paid if the policy is cancelled
Cashback will not be paid if you stop paying or reduce your premiums

So it looks like you'd need to carry on with your premium past April to get the cashback, and so could not add money to a Scottish Friendly ISA in the next tax year.

AirlieBird

jamei305 wrote: »

So it looks like you'd need to carry on with your premium past April to get the cashback, and so could not add money to a Scottish Friendly ISA in the next tax year.

The OP could transfer to Scottish Friendly and then contribute but it depends on what cost, if any, Shepherds would apply and if Scottish Friendly allow transfers in.

wildcath_20

So the Sheppard policy is a Stocks and Shares ISA so I am allowed a different type of ISA in the same tax year - ie. Cash ISA.

The Scottish one describes itself as an investment ISA so I am going to assume that to be the same type so still in the same boat really.

From reading HUKD forums some people say they get their cashback confirmed before the 4th Payment goes out so fingers crossed it works out.

Although the Scottish one does say in its T&C's that cashing in before 5 years will have a £50 penalty which is worth noting. Shepherds don't have any penalty for withdrawing.

Seems like a good way to make a couple hundred quid.

wildcath_20

AirlieBird wrote: »

The OP could transfer to Scottish Friendly and then contribute but it depends on what cost, if any, Shepherds would apply and if Scottish Friendly allow transfers in.

Could work in theory but might be more hassle than its worth. Would I be right in thinking that each ISA provider checks to ensure you have no other active ISA's when applying? Or is this only one ISA rule something that is seldom enforced.

ColdIron

The ISA providers do not check but they provide your details to HMRC whom you can be certain do check. It's not a matter of 'active' ISAs. It's a matter of subscribing (paying new money into) more than one of the same type in a tax year

jimjames

Curious to see the performance & charges of that Shepherds ISA, it's quite shocking how low it's been. 3% every year for the last 5 years when the stock market rose 20% in 2016 alone. Obviously it's a with profits product so not directly comparable but the charges still look very steep.

OP should also bear in mind that if they're cashing out early then they may not get back their money invested and that could outweigh the cashback.