Transfers from S&S ISA to be scrapped

mebu60

LHW99 said:

kempiejon said:

I read only 40% of people eligible have an ISA, under 10% of those subscribing use to full allowance, half of subscribers add only £3k a year. 
And of course the patriarchy. Over 40% of male ISA holders paid into a stocks and shares account, compared to just 26% of female ISA savers. 

I seem to remember that when interest rates were low, some commentators were saying that cash ISAs were no longer worth using. Those who took notice of that will have missed out on the opportunity to accumulate a significant untaxed cash amount.

One more example of "use it or lose it" (while it's still available).

Mentioning no names, ML [cough]. 

someone

someone said:

Could you transfer previous years' subscriptions from an S&S ISA to a Cash ISA at any point where the limits were previously different (1999/2000 and 2013/2014)?

I've looked it up. 

Prior to the launch of the "New ISA" regime on 1 July 2014, there was an imbalance between Cash ISA and S&S ISA. When there was an imbalance, it seems transfer was only permitted one way (Cash -> S&S).
At the launch of the "New ISA" regime, when the allowance was unified at £15,000 transfers were allowed both ways (Cash -> S&S and S&S -> Cash). 

2. NISA subscription rules from 1 July 2014
What is changing on 1 July 2014?
From 1 July 2014, you will be able to split the amount you pay into an ISA between a Cash NISA and a Stocks and Shares NISA as you choose - up to the new overall annual NISA limit of £15,000. Previously, it has only been possible to save up to half of the overall ISA subscription limit in a Cash ISA.
Any subscriptions you have made to an ISA since 6 April 2014 will count against the £15,000 NISA subscription limit for 2014-15.
If you have paid into a Cash or Stocks and Shares ISA since 6 April 2014, you will not be able to open a further NISA of the same type before 6 April 2015. You may however make additional payments – up to the £15,000 NISA subscription limit - into your existing account(s) or by transferring those account(s) to another provider that will allow additional amounts to be added
[...]
3. New rules on transfers from 1 July 2014
What is changing on 1 July 2014?
From 1 July 2014, you will be able to transfer amounts you hold in a Stocks and Shares NISA to a Cash NISA. This applies to amounts that you have paid in since 6 April 2014 as well as amounts that you have paid in during previous tax years. As currently, you will also be able to transfer any funds from a Cash NISA to a Stocks and Shares NISA if you wish.
[...]
Can I transfer savings back again?
Yes – after 1 July 2014 you can transfer between Cash and Stocks and Shares NISAs as many times as you wish.

[archive.org - HMRC - The New ISA – Frequently Asked Questions]

It does seem we are returning back to the before the "New ISA" system. 

clairec666

cloud_dog said:

My only gripe really is in how they have made using ISAs so unreasonably complicated re allowances, transfers, holdings, etc.

It is the transfer situation which probably raises the biggest risks; not allowing people to adequately mitigate risk at points where they need to. 

It going to put our young 'uns S&S LISA in a bit of a pickle, insofar as they are investing but they had a small inheritance which they didn't want to risk (sentimentality and all that) so it was decided to simply put that money into a STMMF  Until the specific details of these changes are printed in black and white there is little point in me looking in to options, but I can forsee it being a PIA. 

It's the removal of choice which I don't like. We're generally advised that investing is best for 5 years +, cash is best for shorter term. Changes in personal circumstances may influence whether you're comfortable with S&S.
It may result in people who've built up a lot of savings in S&S ISAs transferring it to cash before April 2027.
Might not affect that many people, who knows.

jimjames

clairec666 said:

cloud_dog said:

My only gripe really is in how they have made using ISAs so unreasonably complicated re allowances, transfers, holdings, etc.

It is the transfer situation which probably raises the biggest risks; not allowing people to adequately mitigate risk at points where they need to. 

It going to put our young 'uns S&S LISA in a bit of a pickle, insofar as they are investing but they had a small inheritance which they didn't want to risk (sentimentality and all that) so it was decided to simply put that money into a STMMF  Until the specific details of these changes are printed in black and white there is little point in me looking in to options, but I can forsee it being a PIA. 

It's the removal of choice which I don't like. We're generally advised that investing is best for 5 years +, cash is best for shorter term. Changes in personal circumstances may influence whether you're comfortable with S&S.
It may result in people who've built up a lot of savings in S&S ISAs transferring it to cash before April 2027.
Might not affect that many people, who knows.

You can still hold cash in a S&S ISA. It might just not get interest or would be taxable interest but it's still possible. People managed prior to 2014

clairec666

jimjames said:

clairec666 said:

cloud_dog said:

My only gripe really is in how they have made using ISAs so unreasonably complicated re allowances, transfers, holdings, etc.

It is the transfer situation which probably raises the biggest risks; not allowing people to adequately mitigate risk at points where they need to. 

It going to put our young 'uns S&S LISA in a bit of a pickle, insofar as they are investing but they had a small inheritance which they didn't want to risk (sentimentality and all that) so it was decided to simply put that money into a STMMF  Until the specific details of these changes are printed in black and white there is little point in me looking in to options, but I can forsee it being a PIA. 

It's the removal of choice which I don't like. We're generally advised that investing is best for 5 years +, cash is best for shorter term. Changes in personal circumstances may influence whether you're comfortable with S&S.
It may result in people who've built up a lot of savings in S&S ISAs transferring it to cash before April 2027.
Might not affect that many people, who knows.

You can still hold cash in a S&S ISA. It might just not get interest or would be taxable interest but it's still possible. People managed prior to 2014

The difference being that pre-2014 anyone putting money in S&S ISAs knew it couldn't be transferred to cash.
Since then, people have been able to build up their investments while knowing that they can convert it back to cash when needed.
People don't like having options taken away from them!

I wasn't in a position to save much money pre-2014 so can't remember what it was like.

Time2Go_25

The money can still be converted to cash if needed, it just can't go into a cash ISA and if the cash is needed, you probably wouldn't want to move it to a cash ISA anyway.

The new rules are a bit of a mess and I would be surprised if there are not significant changes during the consultation. 

DavidT67

Well we don't know the new rules yet, and I've already noted two workarounds for the holding cash in / getting cash out of S&S ISA restrictions on one of the many other threads on this as of now hypothetical situation.