Did I make a mistake? ISA & Fixed 1Yr Saving Account

cagedanimal73

Thank you to everyone who has responded, some very useful information to digest here.

cagedanimal73

penners324 said:

Plus do you really need that much in cash holdings?

Put a chunk of it into a pension and / or S&S ISA is likely to be a better long term plan 

I have thought about it, but I have already maxxed out my £20k in a Cash-ISA.
However, I suppose I could look to bring some back out while I am still in the window and go the S&S investment route but I'm not comfortable with the risks involved at the moment.

Kim_13

cagedanimal73 said:

penners324 said:

Plus do you really need that much in cash holdings?

Put a chunk of it into a pension and / or S&S ISA is likely to be a better long term plan 

I have thought about it, but I have already maxxed out my £20k in a Cash-ISA.
However, I suppose I could look to bring some back out while I am still in the window and go the S&S investment route but I'm not comfortable with the risks involved at the moment.

Plenty of time to invest in the new tax year when it is likely that 100% of the ISA allowance will not be available in cash as it is now. 

saajan_12

cagedanimal73 said:

I think I made a rookie mistake! Could anyone please advise what I should do next?

Even if you did exceed the £1000 savings allowance, the worst that happens is you pay 20% tax on the bit that goes over. You still get 80% of the interest, so its always better to maximise the income even if that means paying some tax. 

So the answer is perhaps
- move the 10k to somewhere earning more this year
- do nothing else this tax year
- In the new tax year, add more to the ISA. 

cagedanimal73

Ch1ll1Phlakes said:

You ask what you should do next. Most people in your situation would do very little as you may have small tax bill on your savings but not enough to be worth changing anything. Your options to try an negate a tax bill next year is to either move your regular savings to Premium Bonds or move them into an ISA when the new tax-year starts.

Thanks.
Sorry, noob question incoming on this - so with my current Cash-ISA which runs from November to November, does this mean I can open a new Cash-ISA from April 6th ? 

cagedanimal73

saajan_12 said:

cagedanimal73 said:

I think I made a rookie mistake! Could anyone please advise what I should do next?

Even if you did exceed the £1000 savings allowance, the worst that happens is you pay 20% tax on the bit that goes over. You still get 80% of the interest, so its always better to maximise the income even if that means paying some tax. 

So the answer is perhaps
- move the 10k to somewhere earning more this year
- do nothing else this tax year
- In the new tax year, add more to the ISA. 

Thank you.

1. Yes, I am exploring the Zopa options at the moment.
2. I think I want to attempt to use the £400 allowance I still have left for 25/26, somehow.
3. My existing ISA is maxxed out at £20k so this isnt an option, but I think I have worked-out I could get a new ISA to start in April 26. 

With potentially so many pots doing different things at different times, I am finding this quite overwhelming!

My ultimate plan was to avoid breaking over my PSA allowance, however I can see the merits of allowing that to happen but my concern with that is that my PAYE tax-code will change and knowing HMRC as we do; it will take me some time to bring it back and ultimately I will ending paying more tax though my wage! 

Kim_13

cagedanimal73 said:

Ch1ll1Phlakes said:

You ask what you should do next. Most people in your situation would do very little as you may have small tax bill on your savings but not enough to be worth changing anything. Your options to try an negate a tax bill next year is to either move your regular savings to Premium Bonds or move them into an ISA when the new tax-year starts.

Thanks.
Sorry, noob question incoming on this - so with my current Cash-ISA which runs from November to November, does this mean I can open a new Cash-ISA from April 6th ? 

Yes, with the ISA allowance for 2026/2027 likely to be confirmed at the upcoming budget. It's speculated to be £20,000 with a maximum of £10,000 in Cash ISAs, but time will tell. 

luci

cagedanimal73 said:

saajan_12 said:

cagedanimal73 said:

I think I made a rookie mistake! Could anyone please advise what I should do next?

Even if you did exceed the £1000 savings allowance, the worst that happens is you pay 20% tax on the bit that goes over. You still get 80% of the interest, so its always better to maximise the income even if that means paying some tax. 

So the answer is perhaps
- move the 10k to somewhere earning more this year
- do nothing else this tax year
- In the new tax year, add more to the ISA. 

Thank you.

1. Yes, I am exploring the Zopa options at the moment.
2. I think I want to attempt to use the £400 allowance I still have left for 25/26, somehow.
3. My existing ISA is maxxed out at £20k so this isnt an option, but I think I have worked-out I could get a new ISA to start in April 26. 

With potentially so many pots doing different things at different times, I am finding this quite overwhelming!

My ultimate plan was to avoid breaking over my PSA allowance, however I can see the merits of allowing that to happen but my concern with that is that my PAYE tax-code will change and knowing HMRC as we do; it will take me some time to bring it back and ultimately I will ending paying more tax though my wage! 

Yes, you can put (currently) £20000 into an ISA from 06.04.26.

I wouldn't worry about exceeding your PSA. It just means you're fortunate enough to have enough savings to do so.

If your tax code is wrong, you can amend it on the HMRC website and it will update within a couple of days.

cagedanimal73

friolento said:

The £500 needs to go into the Zopa current account and can be withdrawn immediately after arriving there. It must come from a non-Zopa account - so you can just shuttle £500between your normal current account and the Zopa current. Or you could withdraw £500 from your Zopa saver to your non-Zopa current account, then send it from there to the Zopa current account, and then transfer it back into the Zopa saver. 

Need to do this once a month, where 'month' starts on the same day your Zopa 4.75% account started, not necessarily a calendar month.

So to confirm what you are suggesting is to open both Zopa-CA and EA accounts then deposit £500 and £9500 respectively into them, and then monthly cycle £500 between both Zopa accounts an my normal current account? Interesting.

My grandma would think that's slightly dodgy, but I'm beginning to think this is a very common practice.

cagedanimal73

luci said:

If your tax code changes, you can amend it on the HMRC website and it will update within a couple of days.

Really? And presumably they'll ask and I will pay any tax owed to them at the same time?

[I have never been on thier website so I do not know how these things are dealt with - the last time I had any dealings with HMRC was in the 90s!]