Splitting Cash ISA

muzzy092

I have around £30k in a fixed rate cash ISA with the post office, about to mature in the next few weeks
I also have a similar amount in a Stocks and Shares ISA with Fidelity.
What I ideally want do is move a part of my cash ISA to Stocks and Shares, but retain a portion in a cash ISA

The challenges I am facing are:
the Post office don't allow partial transfers out
The Fidelity don't allow partial transfers in.

I know I can open one more Cash ISA this financial year.  

is there a way of achieving what I want whilst retaining the money within an ISA wrapper?

Have others tried to do this, and what approaches did they take?  Perhaps it is possible in 2 years by moving the money to a more flexible ISA?

Strikes me this sort of rebalancing / splitting between Cash and Stocks  is a pretty reasonable thing to want to do, but it doesn't appear to be very easy and / or requires some forward planning?  Any thoughts on this problem welcome!

Eco_Miser

Do Fidelity allow partial transfers out to a Cash ISA?

You can open as many cash ISAs as you want each year, but can only subscribe to one. You can fund the others by ISA transfers though.

So open a cash ISA that does allow partial transfers,  by transferring the PO ISA to it. Then partial transfer to Fidelity, and if you want transfer the rest to a cash ISA offering the best interest.

MDMD

Eco_Miser said:

Do Fidelity allow partial transfers out to a Cash ISA?

You can open as many cash ISAs as you want each year, but can only subscribe to one. You can fund the others by ISA transfers though.

So open a cash ISA that does allow partial transfers,  by transferring the PO ISA to it. Then partial transfer to Fidelity, and if you want transfer the rest to a cash ISA offering the best interest.

Or the OP could transfer the Post Office to Nationwide as their ISAs are flexible and they use a  “portfolio” approach. Once the funds are there, it can be spilt (assuming no current year payments made in) over as many ISAs as they need.

muzzy092

Thanks Both - i didn't realise you can open multiple cash ISAs in a tax, but can only pay in to one, the rest funded by transfers. That provides more flexibility. I'll have a look at Nationwide and ask the question of Fidelity. 

colsten

This might at first look a silly suggestion, and it may not work if you have already made ISA subscriptions in 2021-22: just cash in your PO  ISA and then do as you like with the proceeds.

These days, cash ISAs are unlikely to pay you any more than a normal savings account if you don't have to pay tax on interest. Even if you were to transfer your entire £30K into the best paying ISA (1.25% for a 7-year fixed term), you are not likely to bust your tax-free savings interest allowance as it would be only £375 a year. As you want to put some of the £30K into your S&S ISA, you are even less likely to bust the allowance. 

Once you have the cash, you can then use your 2021-22 ISA allowance. Put up to £20K into your S&S ISA, and the remaining £10K all into the best savings account you can find. You could consider distributing it over a number of Regular Savers which pay better AER than an ISA would pay, and also put £1K into a Virgin M Plus account (2% AER). You could also consider Premium Bonds if you haven't maxed them already. No guarantee you will win anything, but you could win big, and with average luck, the return is still 1% tax free. 

If you can't warm to this idea and want to retain the ISA wrapper, see the previous suggestions.