Switch Investment ISAs to Cash ISAs whilst I can

otherwayup

My wife and I are in the "distribution phase" of our financial lives.  Due to the 20k annual limit, I'm yet to complete moving all those funds staying in cash into cash ISAs.  With the potential for a reduction in the annual cash ISA allowance, I'm considering switching 2 investment ISAs into cash ISAs before the Autumn statement.

Any pitfalls/downsides (other than potential return differences) that anyone can think of?

Thanks

UncleTomCobley

Just to be sure, there is no monetary restrictions on transferring monies held in investment ISAs into cash ISAs. Any such transfers are not new subscriptions and, as such, are independent of any annual ISA subscription limit/allowance (and any associated speculation on changes to this limit/allowance).

 

As it says here https://www.gov.uk/individual-savings-accounts/transferring-your-isa
“You can transfer all or part of the savings in your Individual Savings Account (ISA) from one provider to another at any time. It can be to a different type of ISA or the same type. The investment can have been made this year or in previous years.”

dunstonh

Any pitfalls/downsides (other than potential return differences) that anyone can think of?

How does that decision fit with your wider finances and objectives?

Are you letting the tax tail wag the dog?  

Albermarle

otherwayup said:

My wife and I are in the "distribution phase" of our financial lives.  Due to the 20k annual limit, I'm yet to complete moving all those funds staying in cash into cash ISAs.  With the potential for a reduction in the annual cash ISA allowance, I'm considering switching 2 investment ISAs into cash ISAs before the Autumn statement.

Any pitfalls/downsides (other than potential return differences) that anyone can think of?

Thanks

It is usually wise not to make finance decisions, based on speculation about how Govt legislation will change in future anyway. 

ColdIron

Nothing has been decided yet so probably best not make hasty decisions, but it's worth remembering that prior to 2016 when the cash ISA allowance was half the S&S ISA allowance, transfers to cash were not allowed

I think it highly unlikely that any changes will come into effect over night

-- Act in haste, repent at leisure

masonic

It is quite possible that unwrapped individual gilt holdings will remain an attractive option for decumulation.

ColdIron

A cash ISA isn't the only solution when in the "distribution phase" of your financial lives

You might consider an allocation to reliable dividend paying funds/trusts. Those dividends could be paid into your cash buffer, either in the existing ISA or paid out, and you draw from there

-- There's more than one way to skin a cat (and it would remove your current dilemma)