Help Understanding ISA's

photek1000

So I have never really had enough savings for an ISA and I understand the nature of them in terms of TAX benefits but I could do with a basic 101 to help my OH out.

She has just received her NHS old scheme pension lump sum and is going to invest the vast majority of it as she isn't planning on full retirement quite yet.

Now she was going to sling it quickly into a Cash ISA for the last dying breaths of the 23/24 tax year, are there any real benefits to this beyond a couple days Tax free interest?

And then in the next tax year she was going to transfer it to a S&S ISA after a bit of research.

To help me though, with an ISA I know you can only hold one of each variety of ISA but can you invest and hold £20K across these per a year and then another £20K then next, if you had the funds or is it that you can only hold £20K total and it doesn't matter when you started said ISA?

It's not that she has that kind of money but I want to understand the system better.

Main question though is any benefit to getting in now on the 3rd April?

amanda1024

The main benefit to getting in now would be if she had £40k - she could add £20k now and another £20k on Saturday. You can also hold any number of each type of ISA. This tax year there’s a limit on the number you can put new money in, but that changes on Saturday

photek1000

Ok, so if you were rich enough you can keep adding £20K to an ISA each and every year and have multiple £20K pots.

If I understand what you've written you could also hold multiple Cash ISA's and multiple S&S ISA's and the only limit is the £20K invested into them over any given TAX year?

gravel_2

photek1000 said:

Ok, so if you were rich enough you can keep adding £20K to an ISA each and every year and have multiple £20K pots.

If I understand what you've written you could also hold multiple Cash ISA's and multiple S&S ISA's and the only limit is the £20K invested into them over any given TAX year?

Yes. And it doesn't even need to be multiple ISAs. If the product allows, you can just keep adding to the same Cash or S&S ISA every year subject to the £20k annual limit. 

photek1000

Lovely, now if only we had such cash lying about 

Albermarle

And then in the next tax year she was going to transfer it to a S&S ISA after a bit of research.

She could just open a S&S ISA now, and add £20K and just leave it as cash, until she is ready to invest. Most ( all?) S&S ISA's have the facility to hold cash.

Most S&S ISA's will pay interest on cash held within them, although a lower rate than can be had with a normal savings account/cash ISA ( usually 1 or 2 % less)

Stocks & shares ISAs: find the best platform - MSE (moneysavingexpert.com)

How to invest in a stocks and shares Isa: The quick and easy guide | This is Money

eskbanker

photek1000 said:

So I have never really had enough savings for an ISA and I understand the nature of them in terms of TAX benefits but I could do with a basic 101 to help my OH out.

photek1000 said:

If I understand what you've written you could also hold multiple Cash ISA's and multiple S&S ISA's and the only limit is the £20K invested into them over any given TAX year?

Out of curiosity, why style it as "TAX" rather than "tax"?

armistice

Albermarle said:

Most S&S ISA's will pay interest on cash held within them, although a lower rate than can be had with a normal savings account/cash ISA ( usually 1 or 2 % less)

Worth noting: Trading212 is currently paying 5.2% on cash held in its S&S ISA

photek1000

eskbanker said:

Out of curiosity, why style it as "TAX" rather than "tax"?

Probably just a sub-conscious hang over from many a work spreadsheet