Interest on cash ISA counting towards £20k deposit limit

Yorkie006

Hi,
I have an older ISA that's about to mature, I have not made any deposits into it (or into any other ISA) in this tax year. Today I checked the balance (as the interest was added recently) and for some reason, the total allowance that should be £20k for this tax year is reduced by the amount of interest that was added. Surely, that's not right? I am about to transfer this ISA into another with a different bank (interest rate is about to drop massively on maturity) so need to get the numbers right. Losing over £3k of the allowance because of added interest seems a bit strange...
Anyone had this happen? Thanks!

gravel_2

Which bank is it?

Ultimately compliance with ISA contribution rules is your responsibility. If, as appears to be the case, this interest payment has occurred within an ISA then it should not deplete your allowance. If you transfer and then contribute £20k then that should still be in compliance with the rules.

I would try to contact current bank to see if they can fix it. I would also be keeping a good record of the various interest payments etc before you close this account in case this comes back to haunt you...

Beddie

I can see it's Yorkshire Building Society. Their systems seem to struggle with interest payments sometimes. Leave it a day or two and it will right itself.

You have not lost any of your ISA allowance!

surreysaver

I've paid into three flexible ISAs so far this tax year - my main one, and stuck a pound into two others in case the interest rate goes down on my main one. 
Should be fun doing two ISA transfers later in the year for a pound each!

Albermarle

In any case you should not really take any notice of these 'how much allowance you have left' figures as they take no account of what you might have contributed elsewhere.