A few ISA questions both S&S and Help to buy

Tails1

In January 2020 I opened an S&S ISA with Moneybox this rounds up all my spending and deposits weekly, I still pay into it. 

In January 2021 I opened an S&S ISA with Plum.  Can anyone confirm that the 2020 ISA does not automatically become a 2021 ISA, as this would mean I’ve got two S&S ISA in one tax year. I’m well below the limit.

Next question I’d like to close the Moneybox ISA and put the money in the Plum ISA. Is this just a case of withdrawing closing and chucking it in the new one. Also is this the correct thing to do until I reach the upper limits of a yearly ISA?

Third question, I’ve got a help to buy ISA with £10k in, I’m starting to think this is a bad investment and I’d be better off with a LISA. Reasons are that outside London you don’t get the cash if you buy a house over £250k IIRC, most houses where I live are over that.

Thanks for any advice I’ll pop back later.

Albermarle

You opened a S&S ISA in the tax year 19/20. However from what you wrote you continued to contribute new money to it in 20/21 . So in that case you can open up a new S&S ISA in 20/21 as long as you do not contribute any new money to it ( you could transfer in from another ISA) . If you have contributed new money to the PLUM ISA , you have broken the rules as I understand it.
If at some point you want to transfer from one ISA to another you do NOT close or withdraw from one and add it to the other .
You ask the receiving scheme to transfer the other one in .

eskbanker

Tails1 said:

In January 2020 I opened an S&S ISA with Moneybox this rounds up all my spending and deposits weekly, I still pay into it. 

In January 2021 I opened an S&S ISA with Plum.  Can anyone confirm that the 2020 ISA does not automatically become a 2021 ISA, as this would mean I’ve got two S&S ISA in one tax year. I’m well below the limit.

There isn't "a 2020 ISA" and "a 2021 ISA" as such and there is no limit on how many ISAs you can open or how many you can have.  However, there is a limit on how many you can pay new money into in any tax year, so if you've already paid into your Moneybox one since 6 April 2020 then you can't pay any new money into another S&S ISA for the rest of this tax year.  Hopefully you haven't funded the Plum one yet?

Tails1 said:

Next question I’d like to close the Moneybox ISA and put the money in the Plum ISA. Is this just a case of withdrawing closing and chucking it in the new one. Also is this the correct thing to do until I reach the upper limits of a yearly ISA?

A way around the restriction mentioned above is to transfer ISAs from one provider to another, so in this case, if you transfer your ISA from Moneybox to Plum then, after doing so, you could pay into the latter.  This only works if Plum allow inward transfers (I haven't checked but you should) and you'd need to get them to initiate the process via their own ISA transfer mechanism, in that closing Moneybox and putting the money into Plum yourself would breach the restriction if you didn't use the Plum ISA transfer process.

Tails1 said:

Third question, I’ve got a help to buy ISA with £10k in, I’m starting to think this is a bad investment and I’d be better off with a LISA. Reasons are that outside London you don’t get the cash if you buy a house over £250k IIRC, most houses where I live are over that.

If you're under 40, won't be buying for at least a year, and are happy to commit money in the knowledge that there are withdrawal penalties if accessing the money other than for buying your first property (or before 60), then a LISA is likely to be suitable.  You can shift the money from your HTB into the LISA but only at £4K per tax year.

Alexland

In January 2020 I opened an S&S ISA with Moneybox this rounds up all my spending and deposits weekly, I still pay into it. 

In January 2021 I opened an S&S ISA with Plum.  Can anyone confirm that the 2020 ISA does not automatically become a 2021 ISA, as this would mean I’ve got two S&S ISA in one tax year. I’m well below the limit.

Next question I’d like to close the Moneybox ISA and put the money in the Plum ISA. Is this just a case of withdrawing closing and chucking it in the new one. Also is this the correct thing to do until I reach the upper limits of a yearly ISA?

You are not allowed to contribute new money into more than one S&S ISAs in the same tax year and it sounds like you have broken that rule. If you act quickly to ask Plum to transfer the Moneybox S&S ISA into your Plum S&S ISA then the ISAs will get merged and it should only be Plum reporting contributions at the end of the tax year in a couple of months.

https://intercom.help/withplum/en/articles/2568749-how-do-i-transfer-an-existing-isa-to-plum

Third question, I’ve got a help to buy ISA with £10k in, I’m starting to think this is a bad investment and I’d be better off with a LISA. Reasons are that outside London you don’t get the cash if you buy a house over £250k IIRC, most houses where I live are over that.

Yes if your purchase is likely to be above £250k then you will not get the HTB ISA bonus so a LISA might be more suitable however read the terms carefully as withdrawal penalties can apply.

eskbanker

Just like buses - wait an hour and a half for a response and then three come along at once....

Alexland

Yes sorry nothing to say your response was incorrect we were both typing at the same time.

At least we both gave the same answer which might be reassuring for the OP.

eskbanker

Alexland said:

Yes sorry nothing to say your response was incorrect we were both typing at the same time.

At least we both gave the same answer which might be reassuring for the OP.

Just to be clear, no apology needed - I wasn't criticising (and was also typing while Albemarle got in first), just making an entirely flippant point!

Tails1

Thanks guys that makes sense an ISA is just an account you can pay £20k per year into. So I’ll cancel my payments into the Moneybox today and ask plum to transfer and plead ignorance? Presume there is no procedure in place? We are talking under a grand.

Tails1

So I’ve stopped putting into Moneybox, although to transfer in it looks like it needs to be in the form of a cash isa which Moneybox don’t appear to offer. Might just shut them both a reopen in April. 

eskbanker

Tails1 said:

Thanks guys that makes sense an ISA is just an account you can pay £20k per year into. So I’ll cancel my payments into the Moneybox today and ask plum to transfer and plead ignorance? Presume there is no procedure in place? We are talking under a grand.

Are you confirming that you've paid into both Moneybox and Plum this tax year?  If you have then, regardless of amount, HMRC will advise you what action, if any, they'll take after the end of the tax year.

Tails1 said:

So I’ve stopped putting into Moneybox, although to transfer in it looks like it needs to be in the form of a cash isa which Moneybox don’t appear to offer. Might just shut them both a reopen in April. 

I think the point Plum are making is that you can't directly transfer investments into their ISA, so would need to sell your investments first in order to transfer as cash, but I don't know if Moneybox would allow you to hold uninvested cash within their S&S ISA.

Tails1

Hi eskbanker, yes unfortunately I have paid into both this tax year. Okay HMRC will contact me. I’ll leave it with them then. 

Moneybox have said I can open an cash Lisa. I’m awaiting plum to provide a transfer in form. It’ll take a couple of weeks due to selling investments etc.