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isa fixed rate and tax free allowance

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hi due to get a small tax free lump sum from early pension.  Will use part of it to pay off some stuff but should have 10k to invest.  Can I put it into an isa account or because I got a tax free allowance on the lump sum does this affect it?

Would I be best to put it into a fixed rate saving account for one year and then transfer to isa next year?

thanks

Comments

  • Ayr_Rage
    Ayr_Rage Posts: 2,743 Forumite
    1,000 Posts Second Anniversary Photogenic Name Dropper
    edited 19 May 2024 at 2:31PM
    Your pension lump sum and an ISA subscription are not linked IN ANY WAY.

    You can invest that lump sum any way you wish as soon as you receive it.

    Depending on your income and tax rates a non-ISA fixed rate may get you a better return.
  • ColdIron
    ColdIron Posts: 9,843 Forumite
    Part of the Furniture 1,000 Posts Hung up my suit! Name Dropper
    jenny45 said:
    Can I put it into an isa account or because I got a tax free allowance on the lump sum does this affect it?
    Yes you can, it doesn't matter where the money comes from
    Do you pay any tax on your savings now? If you don't an ISA may not benefit you
    Would I be best to put it into a fixed rate saving account for one year and then transfer to isa next year?
    What would be best for one person may not be best for another
    You could put it into a one year fixed rate ISA
  • jenny45
    jenny45 Posts: 59 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    thanks everyone  :)

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