From Cash into S&S ISA

Malibusmash

I have used my full £20k allowance for this year into a cash ISA, which also contains money from previous years (almost £100k all in all).

Having never 'dabbled' before, I'm keen to learn about and dip my toe into stocks and shares and would like to transfer £500 from my Cash ISA into a S&S ISA. Am I able to do this without flouting the ISA rules and regs?

eskbanker

Yes, you can transfer from cash ISA to S&S ISA as long as your chosen S&S ISA provider accepts such transfers (they should do).

You must keep all current tax year contributions together though so when you transfer you'll need to make it clear that the partial transfer is from prior year money rather than this year's.

And aside from the issue of having £100K in cash form (which you're now looking at addressing), it's also worth rejigging it so you don't have more than £85K in any single institution, as this is the FSCS deposit protection limit, beyond which you wouldn't be reimbursed if your bank went under....

Malibusmash

Thanks so much for your reply. What then, if I got more adventurous and wanted to transfer another £500 in next month and then maybe another £500 in December (for example) - would I still be allowed to do this?

Or should I just open a non ISA general S&S account so as not to confuse the matter (until next April's new ISA allowance begins)?

eskbanker

Further partial transfers would be fine but you might find it cumbersome to keep shifting small amounts every month via a transfer process not really designed for regular use (ISA transfers often take three weeks).

Malibusmash

I know you can't 'advise' but would you be confident transferring £15k into a S&S ISA with an aim to holding it still for 5 years? Or should I just start slowly with the £500? (#veryconfused !)

eskbanker

Investing is a long term activity and it isn't practical to judge its outcome for many years, with plenty of ups and downs along the way, so the value of consciously putting small amounts in as some sort of test is questionable, although drip-feeding specifically to hedge against short term price fluctuations is a valid approach. In other words, what would you actually have hoped to learn by putting £500 in?

Anyway, if I recall correctly my first venture into S&S ISAs instead of cash ones also entailed putting £15K in in one go (and I haven't looked back since) so my actions probably speak louder than my words!

Spend time reading up on this site, both the editorial sections and also all the newbie investor forum threads, and then once you've decided on a strategy, go for it....

Malibusmash

Much appreciated, many thanks