April 6th - Cash ISA or S&S ISA dilemma

MEM62

PaulW63 said:

With tumbling global share prices going on at the minute, is it a good time or a bad time to be considering investing in a S&S ISA tomorrow? I have £20k which I was going to put into an existing 5.22% cash ISA (Shawbrook), but would appreciate any comments whether it may be an opportunity to buy when share prices are low. If so, any tips?

It's a sufficient dip in the market to tempt me to take some cash (£20K) out of the pot I had earmarked for settling our mortgage next year and have just stuck it in my S&S ISA.  

TheBanker

aroominyork said:

TheBanker said:

...I would be surprised if any ISA rule changes impact existing subscriptions. 

Am I right in thinking that if the cash ISA is abolished or the amount reduced (£4k is widely mooted), it is very unlikely to take effect before 6 April 2026?

PS  If I start a cash ISA this year, can I subsequently transfer its contents into my existing S&S ISA? (PPS  Just googled it... yes, you can. Leaving this here for others who might want to know, to keep their options open ahead of possible ISA changes. (Apols trickydicky14 for posting here!)

It's all speculation at this point. We do not know what might happen to Cash ISAs other than the Government are doing a review and there have been indications that they may look to reduce the Cash ISA limit to encourage more investing.

However it is reasonable to think that HMRC and the industry would need some time to make changes to their rules, processes and systems, so in my opinion if a change is announced in the Autumn it won't take effect until the 2025/6 tax year.

masonic

TheBanker said:

However it is reasonable to think that HMRC and the industry would need some time to make changes to their rules, processes and systems, so in my opinion if a change is announced in the Autumn it won't take effect until the 2025/6 tax year.

Do you mean 2026/7? If so, I agree. It's hard to see how it could be otherwise. Providers will need time to adjust their systems. But one thing that could be stopped fairly swiftly is transfers from S&S to cash ISAs.

TheBanker

masonic said:

TheBanker said:

However it is reasonable to think that HMRC and the industry would need some time to make changes to their rules, processes and systems, so in my opinion if a change is announced in the Autumn it won't take effect until the 2025/6 tax year.

Do you mean 2026/7? If so, I agree. It's hard to see how it could be otherwise. Providers will need time to adjust their systems. But one thing that could be stopped fairly swiftly is transfers from S&S to cash ISAs.

Indeed I did - slip of the keyboard!

Lothian5

Maybe worth making sure making sure the cash ISA is flexible.  I have 2 S&S ISAs and one Cash ISA.  
I have just topped up the Cash ISA with 20k today, but need to withdraw 50k from that ISA later this year towards a deposit for a new flat (its a new build and yet to be built, June - September).  I then plan to put top up up with £20k following the sale of my current flat which I'm not selling until after the new build has been purchased. 
Even is there are going to be changes, I don't think they can stop me paying back in this year using the flexible rule. 

masonic

Lothian5 said:

I don't think they can stop me paying back in this year using the flexible rule. 

Unlikely. This hasn't even been part of the speculation. Even if flexibility was changed, automated systems are set up to allow it and will need time to reconfigure.

david72

trickydicky14 said:

Why do we get so much ISA questions in this section when we have a dedicated ISA section above?

I suspect that many people unfortunately either just don't "see" the link to the ISAs sub-forum, as there are a good handful of "info boxes" in the top part of the page to be scrolled past before you get to the list of topics (and so they just skim straight past it, treating it as "yet another" irrelevant info box to be ignored - we all generally only tend to see what we are looking for), or that it doesn't look obviously enough like an actual link to a sub-forum and so many people probably interpret it as just a further description heading for this forum, and don't realise that it is actually a link that can be followed? 

From a UI perspective, it would probably help quite a bit if the link heading was accompanied by a folder icon, to make it clearer that it it is a sub-forum link, rather than the "piggy bank" icon, which serves no navigational purpose, and which further makes it look as though it is just decorative/descriptive. 

It would probably also help if that whole box were to have the link "hover" effect applied to it (eg, changing colour slightly, and underlining the link) as you move the mouse over it, again to emphasise that it is a link. It is ironic that so much navigational accessibility comes built-in to HTML+CSS by default which some unthinking poor designers then spend time and effort trying to disable, making things less usable in the process!

It is probably also a further weakness of the current flatso "design" fad, in that if the list of topics and pages navigation were actually contained within a thin border box, with a repetition of the "Savings and investments" heading immediately above the pages navigation, it might also help to make it a little bit clearer that "this" is the content of this page, and that the sub-forum link box is more definitely something separate (it would probably help to prefix the sub-forum name with "Sub-forum: " as well, to give further emphasis that it is a link that can be followed).

Chloe_G

I was going to bed and ISA but I don't think I'm going to do that now 🤔

Hattie627

Chloe_G said:

I was going to bed and ISA but I don't think I'm going to do that now 🤔

Did you stay up all night with Isa instead? 

vacheron

Chloe_G said:

I was going to bed and ISA but I don't think I'm going to do that now 🤔

There are still benefits to Bed and ISA in a depressed market if you are in for the long haul. 

Bed and ISA when shares are lower means you can move more shares into your ISA within your 20K allowance, or if the shares you are moving total less than 20K, you will have less (or no) CGT to pay.

Also, by moving in low, you will be protecting those shares from larger capital gains once you reach the point that the markets recover again (which they will, the only variable is the timescale).