Switching between types of ISA, LISA and between providers

LL_USS

eskbanker said:

LL_USS said:

My question now is when to open a new S&S one, within this financial year (for e.g. in December 2024) for avoiding rate drops, or wait till the next (6 April 2025) for simplicity. My fixed rate one was opened for the last financial year (up to 5 April 2024). I then opened another cash ISA, flexible type, variable rate, for the current financial year (up to 5 Apr 2025). My vague understanding of the new ISA rules is we can open multiple ISAs in a year as long as we have to transfer all exisiting ones in the new one and the total new money put in in a year does not go over the annual allowance (20K for both LISA and ISA).

Not sure what you mean by 'avoiding rate drops' in the context of opening a S&S ISA, but your understanding of the ISA rules is effectively out of date - there is indeed a rule that total contributions (of new money) must be no more than £20K in aggregate, but this can now be spread across as many ISAs as you wish.

@eskbanker thank you for your prompt help and silly me, yes I should only worry about rate drop if I move that ISA account to another fixed rate one. No implication if I move to S&S.

I have just googled and yes I can see that I don't have to transfer all existing ISAs into a new one. Another silly comment of mine - as I am having two existing ones at the moment within this financial year. It is just about adding more money in one ISA a year only, I think. My finance literacy is weaker than I thought

eskbanker

LL_USS said:

eskbanker said:

LL_USS said:

My question now is when to open a new S&S one, within this financial year (for e.g. in December 2024) for avoiding rate drops, or wait till the next (6 April 2025) for simplicity. My fixed rate one was opened for the last financial year (up to 5 April 2024). I then opened another cash ISA, flexible type, variable rate, for the current financial year (up to 5 Apr 2025). My vague understanding of the new ISA rules is we can open multiple ISAs in a year as long as we have to transfer all exisiting ones in the new one and the total new money put in in a year does not go over the annual allowance (20K for both LISA and ISA).

Not sure what you mean by 'avoiding rate drops' in the context of opening a S&S ISA, but your understanding of the ISA rules is effectively out of date - there is indeed a rule that total contributions (of new money) must be no more than £20K in aggregate, but this can now be spread across as many ISAs as you wish.

@eskbanker thank you for your prompt help and silly me, yes I should only worry about rate drop if I move that ISA account to another fixed rate one. No implication if I move to S&S.

I have just googled and yes I can see that I don't have to transfer all existing ISAs into a new one. Another silly comment of mine - as I am having two existing ones at the moment within this financial year. It is just about adding more money in one ISA a year only, I think. My finance literacy is weaker than I thought

The point is that not only can you have multiple existing ISAs but you can fund multiple ISAs (of the same type) with new money, which wasn't the case in previous tax years.

LL_USS

eskbanker said:

The point is that not only can you have multiple existing ISAs but you can fund multiple ISAs (of the same type) with new money, which wasn't the case in previous tax years.

@eskbanker
Oh I didn't know that. So, say this December after the fixed rate runs out for one ISA account of mine, I can move that one, say, to an S&S account. And I can still keep adding some more in my other ISA account, the flexible one with variable rate, for some flexibility. As long as all money put in this year across any ISAs (and LISA) is within 20K allowance.

I think it says for LISAs still I can only open one a year. I will need to wait till after 6 April 2025 to open an S&S LISA and move the current one in.

LL_USS

I am reading this one: https://www.ybs.co.uk/savings/guides/how-many-isas-can-i-have, which says I can only keep paying in one ISA. Please bear with me - as I am so slow at this

eskbanker

LL_USS said:

eskbanker said:

The point is that not only can you have multiple existing ISAs but you can fund multiple ISAs (of the same type) with new money, which wasn't the case in previous tax years.

@eskbanker
Oh I didn't know that. So, say this December after the fixed rate runs out for one ISA account of mine, I can move that one, say, to an S&S account. And I can still keep adding some more in my other ISA account, the flexible one with variable rate, for some flexibility. As long as all money put in this year across any ISAs (and LISA) is within 20K allowance.

I think it says for LISAs still I can only open one a year. I will need to wait till after 6 April 2025 to open an S&S LISA and move the current one in.

Sorry, yes, the rules are more specific for LISA, so you can only fund one of those in any tax year, up to £4K, but the previous rule applied to the other types was revoked, so you can fund multiple cash ISAs, S&S ISAs, etc.

LL_USS said:

I am reading this one: https://www.ybs.co.uk/savings/guides/how-many-isas-can-i-have, which says I can only keep paying in one ISA. Please bear with me - as I am so slow at this

Many institutions haven't updated their material since the rules changed in April - as these were effectively optional, some will still prevent you from paying into more than one ISA with them, but they can't stop you paying into someone else's....

LL_USS

@eskbanker ah yes - regarding your last point about optional provision, I think i read about that somewhere too.

Whilst I will need to check with the current provider and the new one to confirm I can still pay into both (within the overall allowance) and I need to work out the break-down of what to pay for each account, the general rules make sense now, thank you soooooooooooooo much!!!!

This makes the whole management between various ISAs in a year more complexed (this is a warning I read about too). I am envisaging my little "portfolio" and can see that it will already take time to manage it:

* LISAs (can have more than one LISAs but can only open one new & pay in one LISA account a year): I will move to one S&S LISA account after 6 April 2025 (each new financial year checking to see if it's still working fine, otherwise move to another provider).

* ISAs (can have more than one ISAs, and can pay in multiple accounts a year within the allowance): a small cash ISA maintained for flexibility - choose best rate in market and move (anytime in the year) when there's a better one. The remaing allowance (20K-4KLISA-cash ISA if I feel that year I need more cash) will be paid into an S&S ISA account (which has transfer-in from the current one that has the fixed rate ending soon). Move the S&S ISA account to another provider (any time in the year) if that one works out better.

I am just noting this down before working out the schedule for the new plan. Thanks again eskbanker.

Albermarle

 before opening a new S&S ISA, make sure checking in advance if that provider accepts transfers in and has the investment options I am happy with, then proceed 

I think in practical terms as a inexperienced investor, almost every S&S ISA or S&S LISA, will have an investment fund(s) suitable for you. Typically funds that are medium risk/ multi asset and low cost are widely available.
You have to take into account that many posters on here are more experienced in this area, so will be more selective, but you could call this more fine tuning and not really something for you to worry about .
Of course though makes sense to have a good look at the website of any provider you are thinking about. Normally you can access lots of info even if you are not actually a customer .

LL_USS

@Albermarle thank you. I am googling around for S&S LISA and think I will open a new one after 6 April 2025 with Dodl, who allows transfer in and swap to S&S, with a broker's account at the side to ask them to charge the LISA fee from there. Reddit says Dodl has hsbc global index fund, which is okay (I just take the words - no idea which fund is which for now).

I will open an S&S ISA in December this year and transfer the one with expiring fixed rate deal in. Perhaps choosing another provider - but I will follow this advice from ML https://www.moneysavingexpert.com/savings/stocks-shares-isas/

cloud_dog

LL_USS said:

@cloud_dog

I have no idea how but since I talked to you, my projected Defined Benefit has increased from 16k/year to 25.6K at retirement (I think perhaps it's because USS reversed the rule of putting anything over 40K salary to investment pot rather than DB after April 2024). My numbers for pension add up now. I still keeping on moving anything over the threshold to higher tax rate to volunteer contribution to pension.

Thanks for your advice regarding how LISA can work out better for basic tax rate people - I am maxing that out again. 

I am thinking I may have a bit of saving left after my LISA, ISA (which I am going to turn into S&S) and volunteer pension contribution, then I will open LISA for my older child too. I am trying to learn about S&S to have a bit more confidence in doing this. My sister was stung by some stock crashing in another country (though she works in finance) - so I am still quite nervous about it. When I start I will chose less risky options I suppose. I have heard  some bigger fund are safer choices over the long term. Any advice?

I can't seem to find what I offered previously  but in relation to investing and others experiences and your own tolerance for risk, I would suggest googling Lars Kroijer "Investing Demysitified" (Youtube, website, book), and / or read Tim Hale's book "Smarter Investing".

Stock markets will always go up and down, but over time they trend upwards.

The time you have available for investments to ride out these ups and downs is quite important, and I mention that as you touched on looking into a LISA for your adult children.  Depending on if/when they might use the LISA to purchase a property (e.g. within 5 years), you may want to consider using a cash savings LISA.  For longer term investments you should utilise risk based investments, e.g. equities / bonds, and the degree to which you expose your self to equities (can be more volatile but hopefully higher returns over time) and bonds (are less volatile, but with lower returns over time) can be dependant on your own attitude to risk (volatility).

LL_USS

@cloud_dog I vividly remember the discussion with you. I have just looked around and realised that I messaged you directly instead of in a forum :-).

My 18 year old son in the future might end needing a property over 425K, higher than what LISA can help buy (the city he wants to live is expensive - perhaps I'll help him buy to share with his sister for a while) so his LISA is probably for pension, but I should keep it in cash LISA until we know, you are right.

I tried downloading Dodl today for my own LISA but it seems I still need to deposit min 100 but I've just used up 4K allowance this year so I'll wait till 6 Apr next year to open S&S LISA with Dodl then - feel better that I still delay this a bit longer whilst I learn more about investing. I'll start from Lars Kroijer, thank you :-). Have a nice day!