New ISA Rates possibilities

timmy17

If the government change how much you can invest in an ISA does it affect when you save so much per month.

E.g currently you can invest £20k across different ISAs over the year.

What happens if they reduce to £4k.

I ask because I've just started to invest in stocks and shares ISA or any other ISA for that matter. If I invest £500 per month from now obviously the first 2 will let part of his years e.g. 3rd March and 3rd April 24 but what about 3rd May till 3 April 25 that will be 12 x 500 = 6000 which would go over the £4k allowance if that was to be the new limit.

Would I have to stop the monthly direct debit payment after the 8th month to avoid going over

Thanks

slinger2

timmy17 said:

If the government change how much you can invest in an ISA does it affect when you save so much per month.

E.g currently you can invest £20k across different ISAs over the year.

What happens if they reduce to £4k.

I ask because I've just started to invest in stocks and shares ISA or any other ISA for that matter. If I invest £500 per month from now obviously the first 2 will let part of his years e.g. 3rd March and 3rd April 24 but what about 3rd May till 3 April 25 that will be 12 x 500 = 6000 which would go over the £4k allowance if that was to be the new limit.

Would I have to stop the monthly direct debit payment after the 8th month to avoid going over

Thanks

Yes, you would have to stop after 8 months. There's no concept of a monthly limit, when you get to the annual allowance (eg £4k) you wouldn't be allowed to pay in any more that tax year.

Albermarle

A bit pointless worrying over the detail about something, which is likely to prove to be just speculation anyway.

timmy17

Ok I just wanted clarification if 4k was the limit. Want sure if id set up a monthly payment before the new rules if they were to happen kicked in

Kim_13

The only ISAs with a monthly limit are Regular Saver ISAs - where it is up to the provider to stipulate what the limit is per month. They vary, as £20,000 is not divisible by 12. If opting for such an account you would expect a monthly limit but beyond that you can use your allowance as you wish through the year and when it is gone it is gone. 

Providers may decide only to accept Direct Debits where 12 x X is under the allowance, and contact customers to adjust them in the event that the allowance is lowered. But that is not infallible considering the customer is perfectly entitled to hold and pay into other ISAs elsewhere.

eskbanker

Kim_13 said:

The only ISAs with a monthly limit are Regular Saver ISAs - where it is up to the provider to stipulate what the limit is per month.

....and Help To Buy ISAs, where the scheme rules set by the government stipulate what the limit is per month!  No longer available for newcomers though, to be fair, and their successor, Lifetime ISA, uses the annual limit route instead.