Stocks and Shares ISA

SavingStudent1

Hello everyone,

I just had a few questions about the stocks and shares ISA please:

1. For someone who hasn't invested before and is planning to start now, would you recommend using a bank or an online platform to invest in ISAs?

2. The ISAs allowance is £20,000 each tax year over the several types of ISAs. Now, I assume once you open an ISA, it will stay open until you close it? So, if I have one opened can I invest £500 this tax year and then add in £2000 next tax year and then add in £20000 the next tax year? I know it sounds funny, but I am trying to figure out, what is the 'allowance' aspect: is this how much you can contribute each tax year?

So e.g. ISA: £500 now, end of tax year worth £650
add in £2000 at start of new tax year, now £2650 and end of tax year £1500 (e.g. my stocks value went down..)
add in £20000 at start of new tax year, now £21500 and end of tax year ....

3. I was just reading an article where someone said they wanted to open a new ISA and it said you could do it with a new provider in your next tax year. Can you only open new ISAs of the same type with new providers? E.g. if I have a cash ISA with HSBC this year of £20000, can I open another cash ISA in the next tax year of £20000 with HSBC, or do I have to do it with another provider? As in, is there a limit of 1 ISA type per provider regardless of the tax year? 

Thank you!

SavingStudent1

P.S., is there any way to edit your post or thread titles? Sometimes I realise I want to edit something, but I don't know how to!

MX5huggy

SavingStudent1 said:

P.S., is there any way to edit your post or thread titles? Sometimes I realise I want to edit something, but I don't know how to!

Yes hit the gear wheel icon top right in the green post header. 

SavingStudent1

MX5huggy said:

SavingStudent1 said:

P.S., is there any way to edit your post or thread titles? Sometimes I realise I want to edit something, but I don't know how to!

Yes hit the gear wheel icon top right in the green post header. 

Thank you, I just realised it is because I am a new member so I cannot do it yet!

HCIMbtw

If your making regular contributions and want to invest in S&S funds i'd use vanguard, its basically the cheapest for regular contributions (i use it myself). 

The downside of it is you only have access to Vanguard funds. 

If you are looking at putting in big lumps sums, in one or two transaction a year other platforms may be better for you. 

You can have multiple ISA's if you wanted, open 1 this year, one next year, but you can only put new money into 1 ISA each year. The 20k limit is the limit of how much you can put in that ISA each year. 

I have no idea why somebody would want to even try hold multiple types of the same ISA with a single bank. In your example of Halifax you would have 1 ISA with them, could put in £20k right now, in April 2022 could put in another 20k into the same Halifax ISA. You would not open another ISA with Halifax to put in the 2022 money.. because there would be no point in the admin for you or the bank. 

Or you could open up a new ISA with Vanguard, and if you put £20k in that in 2022, you couldn't put anything in the Halifax one in 2022 without breaching the rules. 

MX5huggy

1. Online platform, banks generally charge more for a restricted choice.

2. The ISA limit is £20000 of contributions per tax year, if the value of the investments goes down or up this does not change. Some flexible ISA allow you to put money take money out and put it back in within the tax year and it only counts towards the £20k once, ignore these for now.

3. in your example you wouldn’t open a new ISA with HSBC you would just be choosing to use your existing ISA for the new tax years contributions and contribute them to the same account. Unless the original account was a fixed rate product that you weren’t allowed to add money to then they would open a second account with HSBC, if that is what you wanted. 

SavingStudent1

HCIMbtw said:

If your making regular contributions and want to invest in S&S funds i'd use vanguard, its basically the cheapest for regular contributions (i use it myself). 

The downside of it is you only have access to Vanguard funds. 

If you are looking at putting in big lumps sums, in one or two transaction a year other platforms may be better for you. 

You can have multiple ISA's if you wanted, open 1 this year, one next year, but you can only put new money into 1 ISA each year. The 20k limit is the limit of how much you can put in that ISA each year. 

I have no idea why somebody would want to even try hold multiple types of the same ISA with a single bank. In your example of Halifax you would have 1 ISA with them, could put in £20k right now, in April 2022 could put in another 20k into the same Halifax ISA. You would not open another ISA with Halifax to put in the 2022 money.. because there would be no point in the admin for you or the bank. 

Or you could open up a new ISA with Vanguard, and if you put £20k in that in 2022, you couldn't put anything in the Halifax one in 2022 without breaching the rules. 

Ah, thank you so much, this makes so much sense! :)

By the way, could I:

- Have a Halifax ISA this year and the next year open a new ISA with Vanguard but put £10k into that in 2022 and put £10k into my Halifax ISA in 2022, so split the 20k allowance over two different ISAs?

SavingStudent1

MX5huggy said:

1. Online platform, banks generally charge more for a restricted choice.

2. The ISA limit is £20000 of contributions per tax year, if the value of the investments goes down or up this does not change. Some flexible ISA allow you to put money take money out and put it back in within the tax year and it only counts towards the £20k once, ignore these for now.

3. in your example you wouldn’t open a new ISA with HSBC you would just be choosing to use your existing ISA for the new tax years contributions and contribute them to the same account. Unless the original account was a fixed rate product that you weren’t allowed to add money to then they would open a second account with HSBC, if that is what you wanted. 

Oh yes, this was what I was trying to figure out, so I just invest the contribution again in my existing ISA! :) Thank you

eskbanker

SavingStudent1 said:

By the way, could I:

- Have a Halifax ISA this year and the next year open a new ISA with Vanguard but put £10k into that in 2022 and put £10k into my Halifax ISA in 2022, so split the 20k allowance over two different ISAs?

You can only split your annual allowance if it goes to multiple ISAs of different types, so you could fund a Halifax cash ISA and a Vanguard S&S one concurrently, but not two S&S ISAs in the same tax year.

Albermarle

 Have a Halifax ISA this year and the next year open a new ISA with Vanguard but put £10k into that in 2022 and put £10k into my Halifax ISA in 2022, so split the 20k allowance over two different ISAs?

Only if they were different types of ISA . You could not contribute new money to two different S&S ISA's in one year.

Do not forget though that the important issue is what investments you buy in the ISA . If you want to diversify your investments you should be able to do that within one iSA .

 Online platform, banks generally charge more for a restricted choice.

I would agree with this generally , but most banks have an online platform offering, so it is not so clear cut .

Plus some of these are getting more competitive nowadays , like the HSBC S&S ISA ( as one example ) 

SavingStudent1

eskbanker said:

SavingStudent1 said:

By the way, could I:

- Have a Halifax ISA this year and the next year open a new ISA with Vanguard but put £10k into that in 2022 and put £10k into my Halifax ISA in 2022, so split the 20k allowance over two different ISAs?

You can only split your annual allowance if it goes to multiple ISAs of different types, so you could fund a Halifax cash ISA and a Vanguard S&S one concurrently, but not two S&S ISAs in the same tax year.

Oh right, now I get it. This is great, thank you!