Cash ISA rule check please

JamesCoffeeKirk

I have just put my max allowance into a Ford Money 1yr fixed cash ISA and sent in ISA Transfer forms for three old cash ISAs now earning next to no interest. I have just had a call from FM (on the last day to be able to transfer in, so too late) and informed that 1 form was invalid due to DOB having a 9 instead of a 0 .
Is it permissible to open an ADDITIONAL cash ISA account for 2019/20 and transfer this one remaining old cash ISA into it? Also, if I did this, since it would mature later than the new FM cash ISA, will it be a problem syncing them all next year with the 2020/21 £20k cash ISA I hope to open? Or may I just as well leave the £4k and add it to a new 2020/21 ISA next month anyway. Considering rates are so low wondering if it's worth the bother?

(I'm assuming here it is most productive when all ISAs are put together in one highest interest earning account sought out every year, and I don't mind it being tied up for 1-yr fixed).

- Thanks

masonic

Yes you can transfer one of your old cash ISAs somewhere other than Ford Money. You could move them all around independently to your hearts content if you so wished.

I don't personally see the attraction of short-term fixed rate ISAs. ISAs must by law allow early access, and very few people actually access their ISA cash - it pretty much stays within the ISA wrapper forever. So why not take a gamble on a longer term fix and worst case you pay an interest penalty to access it at some stage. The chances of interest rates going up in the short term are pretty slim.

Alexland

masonic said:

very few people actually access their ISA cash - it pretty much stays within the ISA wrapper forever.

Are there any stats on that? I have had loads of Cash ISAs since they launched and have often withdrawn for one reason or another.

masonic

Alexland said:

masonic said:

very few people actually access their ISA cash - it pretty much stays within the ISA wrapper forever.

Are there any stats on that? I have had loads of Cash ISAs since they launched and have often withdrawn for one reason or another.

I don't think there are stats for withdrawals. It isn't information that's collected by HMRC. You'll probably be aware of this information they publish annually: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/797786/Full_ISA_Statistics_Release_April_2019.pdf

I probably shouldn't have made my comment look like a statistic, it was just based on anecdotal accounts here often made by people concerned about preserving the tax free status of their money. But in relation to the OP, it's more a case of fixing for a year, then going on to fix for another year, and another... but not wishing to fix for more than a year at a time, despite having no spending plans for any of the money.

RobertAnthony51

I have two Cash ISA accounts from previous years ISA allowances rolled up. One is with Shawbrook and one with Paragon. I don't want to exceed the £85k FSCS protection limit in either account and so this year staying within the £20 allowance I want to add £7k to one account and £13k to the other. Is this allowed? Shawbrook Bank says I MUST only put money into one account in any one year and I cannot split it in this way. IS THIS CORRECT?

eskbanker

RobertAnthony51 said:

I have two Cash ISA accounts from previous years ISA allowances rolled up. One is with Shawbrook and one with Paragon. I don't want to exceed the £85k FSCS protection limit in either account and so this year staying within the £20 allowance I want to add £7k to one account and £13k to the other. Is this allowed? Shawbrook Bank says I MUST only put money into one account in any one year and I cannot split it in this way. IS THIS CORRECT?

YES, IT'S CORRECT, you can only pay new money into one ISA of each type in any given tax year.

Can you perhaps transfer some prior year money from one into the other to allow you to balance the two accounts while paying the full £20K into just one of them?

Alternatively, if you're getting close to £170K in cash ISAs, do you really need to be holding that much in cash form, as it's likely to lose real-terms value to inflation in the long term?

RobertAnthony51

My STOCKS & SHARES ISA recently lost 27% of its value so thank goodness I still had CASH ISAs albeit losing value because the greedy Banks pay interest below inflation.

masonic

RobertAnthony51 said:

My STOCKS & SHARES ISA recently lost 27% of its value so thank goodness I still had CASH ISAs albeit losing value because the greedy Banks pay interest below inflation.

Thanks for sharing, but it would really be better to compare the returns from S&S vs cash over periods of time longer than a couple of months. If you were expecting S&S to outperform cash in every 2-3 month period then I regret to inform you that was unrealistic.

Albermarle

RobertAnthony51 said:

My STOCKS & SHARES ISA recently lost 27% of its value so thank goodness I still had CASH ISAs albeit losing value because the greedy Banks pay interest below inflation.

Your S&S ISA must have been invested pretty aggressively for growth , so you are bound to feel a downturn in the markets more keenly. A typical medium risk portfolio of investments is down around 10/12% and back to where it was a year ago.

Alexland

Albermarle said:

Your S&S ISA must have been invested pretty aggressively for growth

Or just invested heavily in UK equities which struggle to recover or grow.

RobertAnthony51

I am elderly and so need to keep my retirement capital/savings somewhere that is 100% safe. 
Is there anywhere I can do this and get interest above inflation?