Can you have a HTB ISA opened in previous years and another Cash , flexible direct ISA this year ?

Pamberlina

I opened a Right to buy ISA in 2018 and made the initial deposit of  £1200 and then the regular £200 monthly payments.  I have not opened any other ISA accounts since. The max you are allowed to invest in HTB is £2400 per calendar year. 

I thought with the remaining tax free allowance £18,600,  I could then open a Cash or Direct ISA , but I have been refused from Barclays , Nationwide , NS& I.   They have all said I need to close the Right to buy ISA, and then transfer the money into one  of  Direct, cash or savings ISA , at the end of the tax year, to qualify for the tax free allowance of £20, 000 per year. 

Is this the case ?  

Is it worth having a Right to buy ISA , if you are only allowed to invest £2400 /per year ? 

Why can't you have two ISA's  for different  lifestyle options, but the total tax free allowance would remain £20, 000 max ?

Please advise, or let me know your thoughts, and feedback. 

grumiofoundation

You can only contribute new money to one cash ISA per year (help to buy ISA - which is what I assume you mean by right to buy?) counts as a cash ISA. So if you have contributed to this in this tax year you cannot open and contribute new money to another cash ISA.When you opened the ISA is not relevant the limits are to do with contributing new money. 

You can pay into help to buy ISA and a cash ISA in the same tax year if they are with the same provider and that provider offers a 'split isa'. 

Cash ISAs are not much use to most people anyway, unless you are going to earn over £1000 in interest (if basic rate tax payer) in this tax year might as well just keep in non-ISA savings account (and will get higher interest anyway). 


You can open and fund more than one type of ISA each tax year - one of cash (inc. HTB), stocks and shares, innovative finance and lifetime ISA.

If you are using the help to buy ISA as savings for a house purchase you may want to look at lifetime ISA. You can pay into a cash ISA and a lifetime ISA in the same tax year. 

https://www.moneysavingexpert.com/savings/lifetime-isas/

Pamberlina

That is great , thank you so much, I have just emailed Barclays to see if they offer this as a service .  

eskbanker

Pamberlina said:

That is great , thank you so much, I have just emailed Barclays to see if they offer this as a service .  

If you mean the 'split ISA' facility then no, they don't - it's only offered by a small number of providers and I'm not sure that any of them would accept an HTB ISA transfer so it's unlikely that you'd be able to take advantage of that quirk:

https://www.moneysavingexpert.com/savings/best-cash-isa/#accordion-content-0334234523-3

One workaround you could consider if you're looking to build up money in non-HTB cash ISAs is to open a stocks & shares ISA and pay in your residual £17,600 (not £18,600) at the end of the tax year, leaving it uninvested, and then transferring it to a cash ISA early in the next tax year, repeating in subsequent years if you wish.

Pamberlina

@eskbanker - If I open a cash ISA in April 2021 , does that mean I cannot invest in the HTB ISA in 2021?

masonic

Pamberlina said:

If I open a cash ISA in April 2021 , does that mean I cannot invest in the HTB ISA in 2021?

Yes, in the same way that if you pay new money into a HTB ISA you cannot in the same tax year pay new money into a separate cash ISA, if you pay new money into a cash ISA you cannot in the same tax year pay new money into a separate HTB ISA.

Pamberlina

Thank you all so much for your help that makes sense, better than my meetings at the Bank.