Nationwide ISA has ended - what should I do? Please help.

MissJaneMarple

So, we made an appointment just over a year ago with Nationwide.  We wanted to take out an ISA £20k each -  we had that in premium bonds and getting nice little wins, but nothing compared to the 6ish % (got nearer 5% in the end)

At the appointment in the branch they "didn't have time to open two"  We took out a 12 month Cash ISA at £15k.  Went back the next day, as per appointment and was told "Can't do it, short staffed".  It is not easy for us elderlies to get there.  We didn't go again - the 25k has sat in Current Account since. Should have called Halifax!  Lots of health appointments and overwhelm stopped us even putting it back in bonds.    Don't tell Martin Lewis! 

These are our savings.  I have teeny weeny pensions, my husband has an ok one.  When one of us dies it will be a struggle and these savings will have to be eked out and dipped into.

We can now open two new ISAs over the phone.  We also have an account with Halifax.  I think they both have a "monthly draw", if you have a certain amount.

We know it is a more than miniscule chance we could win in either a Building Society or Premium Bond draw, but we like the teeny chance and it's better than no chance in our opinion.

(I've finally retired after over 50 years, husband worked over 60 years. Paid 19% interest on mortgage in the 80s!)

So, please, do we just put the £40 back in Premium Bonds  or take out 2 ISAs? If ISAs Nationwide or Halifax? Or one each?

Thank you so much.

refluxer

As ISA accounts often pay a lower rate of interest than their non-ISA equivalents, the first thing to check is whether you actually need an ISA.

With the personal allowance (£12,570), starter rate for savings (£5000) and personal savings allowance (£1000), low earners can earn up to £18,570 in combined salary/pension/savings interest income without paying tax so if your pension and savings interest income falls under this, then an ISA may not necessarily be the best place for your savings.

More info here : https://www.moneysavingexpert.com/savings/tax-free-savings/

Flugelhorn

agree - @refluxer - I discovered my mother had been saving in a Nationwide ISA when she wasn't liable at that time for any tax on her savings - could have got a better rate elsewhere 

Janie2008

The nationwide isa has a slightly better rate than the Halifax. Can you not open them online? 

Catplan

If going the ISA route, please remember to transfer the existing ISA, this isn’t overly complicated and is initiated when open the new ISA, it means you then have preserved this year’s allowance.

MissJaneMarple

Thank you.  I thought that as we have a government pension each that took up most of our tax free allowance. I will click that link and read about tax-free savings, thank you.  We do not do online banking.  I do a lot of stuff online, but that is a step too far -- I get nervous/overwhelmed.  The Branch of these 2 is not too far away, but I wasn't impressed with our last visit to Nationwide and Halifax told me I cannot open an ISA in Branch, but I can use their phone in Branch to open one by phone!  If we do not need an ISA then would NS&I Growth Bonds or Income Bonds be better? Thanks again

lr1277

In terms of the NS&I products you need to decide how quickly you want access to the money.

Do you want something like an instant access account in which case the income bonds might be suitable.

The growth bonds have periods of 2, 3 & 5 years. You can't take the money out before those time periods finish. The other thing which might or might not work for you is that the interest is taxable income in the year the bond matures. That means for x years there is no income so not taxable. But you might get a big hit of interest and potentially tax in the year it matures.

If you believe you have enough income/savings without the saved money than the growth bonds might work. If you think you might need the money at any time, then the income bonds might be better.

In terms of pension, you both have a pension and you both have a tax free allowance.  Your husband's pension can be set against his allowance and your pension can be set against your allowance.

When my dad passed, his pension was added to my mum's pension. However I don't know if that applies to everyone or if my dad did something to set that up.

friolento

MissJaneMarple said:

would NS&I Growth Bonds or Income Bonds be better? Thanks again

If you don’t do online banking, you wouldn’t be very happy with NS&I accounts. 

Is there someone you trust who can help you with your banking needs and to set up online banking for you? Do you have plans for a POA?

lr1277

According to the ‘Getting started’ page for NS&I income bonds, you can apply and manage the bonds online, by phone or by post.
Edite to add: To be fair, i don’t know how long all those communication channels will continue. Look at Premium bonds. You used to be able to buy them in the Post Office.

MissJaneMarple

Hi  Thank you all.  For clarification, we do lots of stuff online including premium bonds, we just do not like online banking - too many risks for people our age to be duped in our opinion. Thanks again.

ni_saver

I would agree that you probably don't need to limit yourself to ISA accounts as basic rate tax payers can earn at least £1000 interest tax free outside of ISAs. However unusually at the moment some ISA accounts are paying equal or higher rates than non-ISA accounts. If we are limiting accounts you can open to Nationwide or Halifax in branch the ISA accounts either match or are better than their non-ISA equivalent so you might as well open ISAs this year if sticking with one of these. Something to bear in mind for next year though.

First you need to consider if you might need access to the money during the year. Do you have spare funds for any unexpected expenses, eg. boiler breakdown? You should keep some money available that you can access for such occasions. ISAs always allow you to access your money but if you open a fixed rate one and need to access it they will charge you an interest penalty. So if you don't already have an emergency fund you might want to keep some of the £40,000 available to access and lock away the rest of it for a year (or more).

Nationwide currently only have 1 ISA account that you can open and manage in branch, currently 4.2% AER fixed for 1 year. If you already have funds you can access in an emergency and only want to open 1 account each for a 1 year fixed term at a fixed rate I would go for this one instead of Halifax as Nationwide offer a better rate. I don't think Nationwide offer a general prize draw though unlike Halifax, but Halifax have millions of customers and I would consider the chance of winning so miniscule I wouldn't turn down Nationwide's better interest rates for it. If you needed another account you could access money from without penalty then the only Nationwide branch offering is their non-ISA instant access account, which will be paying a rather poor 2.05% AER variable on up to £10,000 from November. It will likely go down further as the Bank of England base rate drops. However, it is better than leaving it in a current account. You could put the majority in their fixed term ISA and a smaller emergency fund in the instant access.

Halifax’s 1 year fixed rate ISA is a bit lower, currently 4.05% AER (or 4.15% AER if you have a personal current account with them). Their easy access offerings are slightly better than Nationwide though. They currently offer a Bonus Saver which allows you to withdraw money without penalty up to 3 times a year if you need access to it. The rate on it is currently 3.7% AER but it is variable and will almost certainly go down as the Bank of England base rate drops. It’s available in both ISA and non-ISA versions but Halifax only let each person open 1 ISA with new money each year, so if you open their 1 year fixed rate ISA you could also open a non-ISA Bonus Saver for an emergency fund.

It might be simpler to stick with Premium Bonds and an advantage is you can cash them out whenever you need to. As the base rate drops though no doubt the prize rate will also fall, whereas with a fixed rate account or ISA you’ll lock the rate in for a year. You could consider splitting your money between Premium Bonds and a fixed rate ISA and that way you'll get the certainty of some interest and the small chance of a big win on the Premium Bonds which you could cash in if you need funds.

If you decide to go for branch based ISAs I would make 2 appointments, 1 each for you and your husband but you could ask the person you make the appointment with if they could be scheduled right after each other. If you return to Nationwide don't be afraid to mention you didn't have a good experience last time and that you've ended up leaving money earning no interest for a year rather than go back until now. I’d like to imagine most staff would be sympathetic and try to make it up to you. If you have another negative experience or appointment cancelled at the last minute you should consider putting in a complaint, you should be compensated for it.

If you do go for another ISA make sure to bring the details of your current Nationwide ISA so you can arrange for that to be transferred to your new ISA. If it was opened in your name you can only transfer it to a new ISA in your name, or if it was in your husbands then it can only be transferred to a new ISA in his.

If there are any other building societies local to you they might have better rates and better customer service.

Wrote a much longer post than I intended, sorry if I've bombarded you with too much information. Try not to be too hard on yourself about leaving the 25k until now. None of us can go back and it sounds like you’ve had a difficult year. All the best.