Transferring partial of my old ISA to a new ISA

Hello,

I have an ISA which currently holds about £110k saved over many years. For this new tax year, I'm finally looking to open a new cash ISA with another provider (perhaps Paragon or Nationwide), and also a S&S ISA with Vanguard.

I intend to keep the previous tax years ISA to hold about £50k (to keep the account under the £85k FSCS protection). I'm planning to transfer the remaining £60k to the new ISA, and then add £10k-£15k to the new ISA for this tax year. The other £5k would be in the separate S&S ISA I would plan to open as well.

  1. Would you say this is a good plan to utilise the ISA tax free allowance? I plan to try out the S&S separately as a first investment, but happy to risk £5k for this.
  2. Does anyone know if it's possible to transfer a partial amount from an old ISA to a new ISA, or does it need to be the entire amount? Ideally I want to keep the accounts below £85k.
  3. What happens to an old ISA? Does it still accrue interest, and can I withdraw money without it affecting the new tax year personal allowance with the new ISA?

Comments

  • eskbanker
    eskbanker Posts: 29,765
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    Hello,

    I have an ISA which currently holds about £110k saved over many years. For this new tax year, I'm finally looking to open a new cash ISA with another provider (perhaps Paragon or Nationwide), and also a S&S ISA with Vanguard.

    I intend to keep the previous tax years ISA to hold about £50k (to keep the account under the £85k FSCS protection). I'm planning to transfer the remaining £60k to the new ISA, and then add £10k-£15k to the new ISA for this tax year. The other £5k would be in the separate S&S ISA I would plan to open as well.

    1. Would you say this is a good plan to utilise the ISA tax free allowance? I plan to try out the S&S separately as a first investment, but happy to risk £5k for this. Keeping £125K in cash sounds excessive, so investing some should be worth it, probably more than £5K unless you have a foreseeable need for accessing the majority.
    2. Does anyone know if it's possible to transfer a partial amount from an old ISA to a new ISA, or does it need to be the entire amount? Ideally I want to keep the accounts below £85k. Partial transfers are allowed as a concept, but not all pairs of providers will offer them, so you'll need to check that.
    3. What happens to an old ISA? Does it still accrue interest, Yes and can I withdraw money without it affecting the new tax year personal allowance with the new ISA? Withdrawals don't affect annual contribution allowances, and neither do transfers, which is what you should be doing here.
    See comments inline....
  • Albermarle
    Albermarle Posts: 20,994
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     I plan to try out the S&S separately as a first investment, but happy to risk £5k for this.

    The problem with this is that in the short to medium term , investments go up and down but in the long term ( >10 years) you can expect an overall positive result.  So if after two years your £5K has become £4K , you could say that your investment was a failure . Or if it had gone up to £6K it was a success,  However in both cases this would be wrong as you can only really assess the success or failure over a much longer period.

    So a little bit more leap of faith is needed and you would most likely be better , investing more than £5K or add £5K pa regardless of short term results .

    There are lots of new investors who post on the related savings and investment forum , so some time scrolling through relevant threads on there could prove useful.

  • tichtich
    tichtich Posts: 143
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    Putting just 5K into equities to start with might not be such a bad idea. Stock market prices are very high right now, so possibly not the best time to invest a large lump sum. I have a lump sum to invest too, and I'm biding my time. 
  • masonic
    masonic Posts: 22,794
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    tichtich said:
    Putting just 5K into equities to start with might not be such a bad idea. Stock market prices are very high right now, so possibly not the best time to invest a large lump sum. I have a lump sum to invest too, and I'm biding my time. 
    This could be said of most of the last 10 years. It would have been quite painful to delay investing in 2011 and hold on for the crash in 2020 for a good buying opportunity.
  • jimjames
    jimjames Posts: 17,482
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    edited 20 May 2021 at 11:23AM
    tichtich said:
    Putting just 5K into equities to start with might not be such a bad idea. Stock market prices are very high right now, so possibly not the best time to invest a large lump sum. I have a lump sum to invest too, and I'm biding my time. 
    If shares prices increase over the long term then you could say they are always very high so would never invest. Last year would have been a good time but how long do you wait for prices to increase before they drop?
    Remember the saying: if it looks too good to be true it almost certainly is.
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