Cash in Maxi ISA for a clean slate ???

curtlyb

I'd be greatful for peoples opinions for my current conundrum..........

Through childcare costs etc we have accrued about £10k of personal debt (this was all expected and calculated for in the last three years as my wife has stayed working full-time and has now benefited from promotion and now the childcare fees have gone.)
So we've now got.............
1) £10,000 of planned debt
2) £10,000 in a 'Jupiter - European Fund' Maxi ISA
3) About £400/month spare investment cash.
The Maxi ISA is a vehicle to paying off £40k of our mortgage hopefully in about 12yrs (currently 8yrs in paying £60/month).

My personal theory is that i cash in the Maxi ISA as, although it started badly in the early 00's, has performed very well in the last 24 months, it still isn't one of the best performing. I would then pay off all our personal debt and then invest £200/month into a couple of new funds (no problem with fairly high risk) to provide the mortgage vehicle + maybe a bit extra in 12-15 yrs time ?
Part of my theory is that the ISA might stop producing 'better than expected' in light of recent stock market movements and that my investment cash could be better utilised elsewhere.
The alternative is that i leave the Maxi Isa running and spend the next 27ish months paying off the debt at £400/month.

I'm not asking anyone to look into their crystal balls but any advice would be greatly appreciated.

Jonbvn

I would always be reticent of cashing in any ISA funds, since you can never reinvest for that tax-year again. Perhaps it would be better to consider transferring your ISA to better performers. You can do this through a fund supermarket. Then you should pay of the £10k using your £400/month.

chesky369

what interest are you paying on your 'planned debt'?

curtlyb

chesky369 wrote: »

what interest are you paying on your 'planned debt'?

The whole debt has always been roughly at 2%-3% which has been entirely the transfer fees to other 0% CC's. £7k will end in March with £1.5k + £1.5k ending in May. Not had to try any new CC's recently but getting the feeling that credit will be harder to apply for due to credit crunch, luckily our planned '3yr year income deficit' has now turned into the '3 year payback' at the right time, just trying to find the most efficient way of paying it back !
The CC's would be in the range of 15% - 18% interest if they were let go after the promotional rates cease, this will never be a problem as i'd get a personal loan if need be.

Primrose

My own reaction is that now is a particularly bad time to cash in your Maxi ISA as the stock market has dropped below the level it was a year ago and once you've lost this allowance you've lost it for good. If you can, I'd transfer it to a more consistently performing fund, possibly something like Perpetual High Income and if possible, hang in there with it for the longer term. I'd continue repaying your debt at £400 a month and see if you can get a good credit card deal. If not, perhaps you could revisit your plans at that point. It depends on how comfortable you feel with debt in the current climate.

curtlyb

Many thanks jonbvn & primrose for the opinions, i'm going to look for a couple of the 14month 0% CC's in the short term and nail the debt that way. I'll also look into transferring the Maxi ISA using a fund supermarket, are they all the same ? can anyone recommend one that produced the goods for them ? is there a good or bad time in the year to transfer it or is it pretty much irrelevant ?
apologies for the Q's :cool:
many thanks again