New ISA - to fix or not?

Sallyforth

Despite having two full one year fixed ISAs for the past couple of years I still find all the small print surrounding them a tad confusing.

I'm currently knocking on the door of paying tax so want to try my best to avoid this. I'm a 63 year old married early retiree in receipt of carer's allowance and income from interest on an inheritance. 

Right now I have around £10k in an easy access savings accounts which I don't need immediate access to.  However, I will have fixed savings accounts maturing later in the year/early next giving me more than enough to invest in the current £20k ISA allowance.

So my quandary is should I put £10k into a fixed rate ISA now and then take out another later on or would it be best to take out an easy access ISA (paying slightly better interest) and then transfer that to a fix when funds become available.  I don't want to lose out if rumours surrounding the cash ISA limit reduces.  Equally, I'm not comfortable with stocks and shares ISAs at my age.  My husband is 79 and I will loose his pensions, benefits and Carer's Allowance when the inevitable happens so again need to be mindful.

Any suggestions or comments would be welcome - many thanks.

SF

MCT56

I can only say what I have done in a similar situation, but not what you should do.  I don’t think I will be alone in wondering what is going to happen to interest rates. I decided to open a new fixed rate isa to pay in some cash for this tax years allowance. The one I went for pays over 4% and has a long funding window of up to 60 days. This gives me a bit more time to decide if I should also transfer-in another fixed rate isa when it matures in the not too distant future. It is sometimes worthwhile cashing in a fixed isa if it has a very poor rate, but there will be a penalty. I have done so in the past but not often.

poseidon1

As a result of the Orange One's tariffs shenanigans, the outlook for UK Bank of England interest rates our steeper falls sooner.

This will likely drag down rates achievable on instant access accounts across the board in the year to come. On this basis I locked into Paragon Banks 15 month 4.40% fixed ISA  both at the end of 2024/25 and topped up with this year's allowance last week. 

The Paragon deal has now gone but assuming you are happy to lock away the £10k for a year, I would  source the best fix you can find now, and review your options to fund another ISA later in the year when your other funds become available.

Being paid interest on a monthly basis was a requirement for any account I opened, if the same applies to you, some fixed rate accounts maybe unsuitable.