ISA question

Zopa_Trooper

I opened an easy access ISA with Shawbrook a couple of months ago, intending to switch it to a one year fix as soon as I could max it out at £20,000. That happened Friday, but after I messaged them they pulled their one year fix, lowering the rate. Can I now open an ISA with a different provider and transfer the funds or am I stuck with Shawbrook?

savit4l8er

No you are definitely not stuck.  You can open another ISA, many transfers are done electronically now, a few still require paper requests but in either case, the fields allow you to state who your ISA is with and there are portions to state if it's previous years only or a mix etc. It will be apparent which parts you need to fill out.

Warning ⚠️

Don't withdraw the funds and close your ISA at Shawbrook yourself, let the new provider do all that or you will lose the tax free status.

There are loads of threads on here about the process if you search. It's often covered in questions about other points as well. 

Keep_pedalling

The above post is wrong.

You can transfer to an existing ISA but you can’t open 2 cash ISAs in the same financial year. 

https://www.moneysupermarket.com/savings/cash-isas-explained/#:~:text=You%20can%20have%20multiple%20ISAs,2024%20tax%20year%20officially%20begins.

Zopa_Trooper

So are you saying, if I opened an easy access cash ISA this year (I did) and the rate was 4.5%, then a month later they reduced the rate to 0.1%, I'd be stuck at that rate for the remainder of the tax year? That doesn't seem right, or fair.

masonic

Keep_pedalling said:

The above post is wrong.

You can transfer to an existing ISA but you can’t open 2 cash ISAs in the same financial year. 

https://www.moneysupermarket.com/savings/cash-isas-explained/#:~:text=You%20can%20have%20multiple%20ISAs,2024%20tax%20year%20officially%20begins.

It is incorrect to say you can't open 2 cash ISAs in the same financial year. This is a common misunderstanding that is corrected here on almost a weekly basis. saveit4l8r is correct.

There is no limit to the number of cash ISAs you can open, but you are only permitted to subscribe new money to one cash ISA per tax year.

Your current year cash ISA can be transferred an unlimited number of times, and can be topped up after transferring if you haven't fully used your £20k allowance (and subject to any funding windows in the case of fixed ISAs).

Cash ISAs from previous tax years can also be transferred an unlimited number of times, including partial transfers if the providers allow this.

To transfer an ISA to a different provider, you must first apply to open a new ISA, without subscribing any new money to it, then during the application or thereafter request your new provider to transfer in your existing ISA. As mentioned above, this can be done an unlimited number of times within the same tax year. You are not restricted to transferring between existing ISAs, although this also possible.

See https://www.moneysavingexpert.com/savings/best-cash-isa/#needtoknows for a much better guide than the misleading moneysupermarket information.

savit4l8er

@masonic

Thank you for clarifying that. Although I knew I was correct, I had a brief panic moment. 😱

Zopa_Trooper

Cheers guys. Virgin here I come.

Albermarle

You might want to search the forum ( search box at the top) for Virgin.