ISA advice

matty_544

I have a LISA with Moneybox and HTB ISA & CASH ISA both with Nationwide as they are a "Split ISA" which allows me to fund both in the same tax year. My full allowance for the tax year is £20,000 as we all know.

With Nationwide cutting rates beginning the 1st of May im looking to maximise depositing into all three ISA accounts before switching to higher rate providers.

Hypothetically can i say tomorrow

1. Max out £4,000 into my LISA, leaving my remaining allowance at £16,000

2. Pay in £200 into my HTB ISA for 1st month out of 12

3. Pay in £13,600 into my CASH ISA leaving my remaining allowance at £2,200

4. Transfer out the CASH ISA to a new provider (thinking Shawbrook 2 yr fixed ISA)

5. Transfer out my HTB ISA to a new provider (thinking HSBC)

6. For the remaining 11 months continue to feed in £200 per month into my now HSBC HTB ISA using my remaining £2,200 allowance.

Is there anything wrong with the above steps. I dont think i would be breaking any ISA rules but please do correct me if im wrong.

regards

Matt

masonic

If you do both of steps (2) and (3) you cannot do steps (4) and (5). Should you wish to pay new money into your HTB ISA and cash ISA, then you must transfer them to another single split-ISA provider, and it would be unwise to contribute to both before transferring them (since most transfer forms cover the transfer of just one ISA and it may be difficult to explain to your receiving split-ISA provider that two ISAs must be transferred together).

I suggest you fund your HTB ISA as usual, then transfer both ISAs to a new split-ISA provider that will allow you to top up the cash ISA after it is received.

Alexland

Yes all current tax year Cash ISA contributions must be kept together so if you put new money into both parts your only option would be to transfer to another split ISA provider or merge both parts into a normal Cash ISA and lose the HTB element.

Albermarle

Transfer out the CASH ISA to a new provider (thinking Shawbrook 2 yr fixed ISA)

Be aware that current offer from Shawbrook may disappear at any time . Until a week ago a number of providers had similar offers, all since reduced. 

matty_544

masonic said:

If you do both of steps (2) and (3) you cannot do steps (4) and (5). Should you wish to pay new money into your HTB ISA and cash ISA, then you must transfer them to another single split-ISA provider, and it would be unwise to contribute to both before transferring them (since most transfer forms cover the transfer of just one ISA and it may be difficult to explain to your receiving split-ISA provider that two ISAs must be transferred together).

I suggest you fund your HTB ISA as usual, then transfer both ISAs to a new split-ISA provider that will allow you to top up the cash ISA after it is received.

Hi thanks for your input.

So i guess its against the rules to transfer out my spilt ISA into indivdual ISAs with different providers. I dont seem to understand the potential gains of the HTB ISA, if i split them with new providers i can only contribute my rmaining 16k allowance to only one, with max £200 a month on the HTB or the full 16k on cash isa. and that will be the same every new tax year in the future right? theres only £1800 sitting in the HTB at the moment.

Any suggestions on the best split ISA provider currently?

thanks

Matt

eskbanker

matty_544 said:
Any suggestions on the best split ISA provider currently?

Not sure there are any split ISA providers still offering HTB ISAs as both are small subsets of the overall cash ISA market and I don't think they intersect, but happy to be proved wrong.

However, I'd suggest taking a step back and revisiting what your objectives are rather than sticking rigidly to your plan of funding three ISAs concurrently - if you're accumulating with a view to a first property deposit then it may make more sense not to use a non-HTB cash ISA if having one inherently compromises your maximum total return, so you may be able to optimise that via taxable accounts instead (plus the LISA and HTB).  Or maybe it would work better to use LISA and a decent cash ISA, ditching HTB?

masonic

Newcastle BS is possibly the only example of a split-ISA provider allowing new accounts to be opened for transfers. Though I'd second eskbanker's advice to think about why you need all three types of ISA.

eskbanker

masonic said:

Newcastle BS is possibly the only example of a split-ISA provider allowing new accounts to be opened for transfers. Though I'd second eskbanker's advice to think about why you need all three types of ISA.

I did have a look at their site and they seem to offer split capabilities via a 'product' known as CustomISA, but it doesn't appear to support many of their current ISAs (and not HTB), based on a quick go of the calculator facility at https://www.newcastle.co.uk/savings/customisa/ but maybe it can be done, perhaps with some manual assistance?

matty_544

masonic said:

Newcastle BS is possibly the only example of a split-ISA provider allowing new accounts to be opened for transfers. Though I'd second eskbanker's advice to think about why you need all three types of ISA.

I think i opened the HTB last year to use as a regular saver without the intention of using to get the 25% bonus on a first property. I think you are right i will ditch the HTB ISA when the rate drops next month.

Ive already done steps 1 and 2.

Can i now put the remaining allowance into my CASH ISA and then do step 4 only.

thanks

Matt

masonic

eskbanker said:

masonic said:

Newcastle BS is possibly the only example of a split-ISA provider allowing new accounts to be opened for transfers. Though I'd second eskbanker's advice to think about why you need all three types of ISA.

I did have a look at their site and they seem to offer split capabilities via a 'product' known as CustomISA, but it doesn't appear to support many of their current ISAs (and not HTB), based on a quick go of the calculator facility at https://www.newcastle.co.uk/savings/customisa/ but maybe it can be done, perhaps with some manual assistance?

Yes and it seems the HTB ISA can only be set up in branch, so probably not an viable option for many, especially everyone following Government advice on social distancing!

masonic

matty_544 said:

masonic said:

Newcastle BS is possibly the only example of a split-ISA provider allowing new accounts to be opened for transfers. Though I'd second eskbanker's advice to think about why you need all three types of ISA.

I think i opened the HTB last year to use as a regular saver without the intention of using to get the 25% bonus on a first property. I think you are right i will ditch the HTB ISA when the rate drops next month.

Ive already done steps 1 and 2.

Can i now put the remaining allowance into my CASH ISA and then do step 4 only.

If you're planning to ditch the HTB ISA when the rate drops then surely the best option is to get Nationwide to transfer the HTB ISA into the other cash ISA, then transfer the lot to Shawbrook (or whoever)? Or you could make use of ISA flexibility and withdraw the £200 subscribed to the HTB ISA this month and then pay up to £16k into the cash ISA before transferring it elsewhere.