Should we clear out our ISAs?

Voyager2002

I think your strategy is sound.

Since your mortgage is relatively small, the day may come when it is all paid off, and you will still be enjoying the tax-free interest from your ISAs. Since you can only invest a limited amount each year, and if you withdraw it your allowance is lost for ever, that is a good reason for leaving funds in your ISAs. However, surely you could do a bit better than Kent Reliance. Have you looked at Ruffler Bank?

As for ways to pay the builders, Martin has just told us about the latest interest-free offer from the Virgin and/or MBNA credit card. You do pay a fee for balance transfers, but this is less than the interest you would earn on the money for the interest-free period. And these cards allow you to transfer the funds directly into your current account, from where you can make payments by cheque.

jetfighter

Hi Voyager2002.

Kent Reliance is Martin's top pick for transfers in, though I don't know how recently the ISA page has been updated. I've just had a look at Ruffler Bank and its minimum investment is £9,000 - my partner and I have £5,500 each in cash mini ISAs so this wouldn't be a possibility for us. We've both maxed out our allowances for 2007/2008.

I'll definitely look into the option of the 0% credit cards, though. I was reading about those last night, "stoozing" as it were, though hadn't considered it for building work. Might be an idea - thanks!

moneysavingwannabe

Hi

We had a similar situation.

We had saved £32000 mainly in ISAs and have just had building work.

We decided to withdraw the majority of the money to pay the builders but the other costs we have put on a 15 mth 0% cc. WHich includes new kitchen,sofa, bathroom suite etc.

I intend to pay this debt of within about 9 mths using monthly savings and the rest of the ISA money which will have earnt some interest.

Our thinking is that we are still young enough to save up again (31 and 36)
and we would rather have no debt and build up our savings. I am new to this stoozing business but am confident that I can pay it off quickly.

Good luck whatever you decide to do.