Help to buy ISA and Cash ISA

Iliaxtida

Hello. I have a Help to Buy ISA with Nationwide the last few years where I can only transfer £200 per month. I stupidly thought that I can have a CASH ISA with HSBC this year for the 1st time and put £20k there (I'm new to this). I understand now that I can only have one ISA per tax year (Nationwide allows to have different Nationwide ISA types but I didn't know that when I opened the HSBC Cash ISA).

What should I do now to avoid being in trouble? Should I transfer the £20k back to my current HSBC account and ask HSBC to completely close the CASH ISA so I don't look like I am subscribed to two ISAs? I assume that I lost my allowance for this year by opening an HSBC Cash ISA :-(

Could someone advise me, please? Thanks so much in advance. 

eskbanker

Is the HSBC cash ISA a flexible one?  Are you still within the cooling off period?

Iliaxtida

I'm still within the cooling off period. I opened it on 29/03. What does it mean a flexible one? I am not allowed to have another ISA with another provider. I checked with HSBC. 

Iliaxtida

eskbanker said:

Is the HSBC cash ISA a flexible one?  Are you still within the cooling off period?

I'm still within the cooling off period. I opened it on 29/03. What does it mean a flexible one? I am not allowed to have another ISA with another provider. I checked with HSBC. 

eskbanker

If you're still within the cooling off period then contact HSBC and advise them that you wish to cancel (not close) the new ISA - this will effectively allow its opening to be voided as if it had never happened, thereby keeping you compliant with the rules.

Nationwide is one of the providers that allow you to fund multiple cash ISAs concurrently (by treating them as one), so if you've already paid into your HTB ISA with them, you can pay the rest of your 2022/23 £20K allowance into another of their cash ISAs, but you'd need to do so by Wednesday!

Flexible ISAs are perhaps a subject for another day, but if you want to read up on them, they're explained at https://www.moneysavingexpert.com/savings/flexible-isas/

Iliaxtida

Thanks so much for your advice. Before I ask HSBC to cancel my new ISA, should I transfer the funds to HSBC current account or will they do it when they cancel it? Thanks again

Iliaxtida

eskbanker said:

If you're still within the cooling off period then contact HSBC and advise them that you wish to cancel (not close) the new ISA - this will effectively allow its opening to be voided as if it had never happened, thereby keeping you compliant with the rules.

Nationwide is one of the providers that allow you to fund multiple cash ISAs concurrently (by treating them as one), so if you've already paid into your HTB ISA with them, you can pay the rest of your 2022/23 £20K allowance into another of their cash ISAs, but you'd need to do so by Wednesday!

Thanks so much for your advice. Before I ask HSBC to cancel my new ISA, should I transfer the funds to HSBC current account or will they do it when they cancel it? Thanks again

eskbanker

I believe they'll do that as part of cancelling it, but check the product terms for an explanation of the process.

Iliaxtida

eskbanker said:

I believe they'll do that as part of cancelling it, but check the product terms for an explanation of the process.

Thanks a lot. Much appreciated.

Iliaxtida

eskbanker said:

I believe they'll do that as part of cancelling it, but check the product terms for an explanation of the process.

I spoke to Nationwide and they suggested that I can apply for the ISA transfer today, and they will backdate it to show that the ISA transfer was completed during the current tax year. Do you think this is feasible or is it too risky? 

eskbanker

Iliaxtida said:

eskbanker said:

I believe they'll do that as part of cancelling it, but check the product terms for an explanation of the process.

I spoke to Nationwide and they suggested that I can apply for the ISA transfer today, and they will backdate it to show that the ISA transfer was completed during the current tax year. Do you think this is feasible or is it too risky? 

The above discussion wasn't about doing an ISA transfer though - I'd be quite sceptical about their ability to initiate one and be able to report it as complete during this tax year at this sort of notice, given their reliance on another party.