Move my cash ISA into a s&s one

Andme1

The lastest drop in interest rateshas meant my cash isa rate has dropped from 4.1 to 3.8%. Is moving it all into my moneybox s&s isa a sensible thing to do? 

I currently have £82k sitting in a cash ISA and 6k in a Moneybox s&s. I realise thats ridiculous and 2026 is the year for me to redress the balance, make my money work better for me and start in earnest planning for retirement in no less than 12 years (19 until ,y current state pensionable age). 

People here are far more clued up than me about these things so from a purely financial point of view do I transfer everything in one go or should I drip feed it in over the next year or is there something better I could be doing? 

Ive already maxed out this years pension contribution with a lump sum plus my normal monthly payments.

PixelPound

Do they allow partial transfers? If not then realise you can use money market funds for cash-like investment in case you wanted to keep some in a cash format.

eskbanker

You need to decide how much you want in cash (e.g. emergency fund, known commitments, etc) and in S&S (long term money), according to your plans and objectives - for money you wish to invest then doing so as a lump sum is statistically better than drip-feeding on average.

masonic

Be aware that forthcoming changes to ISAs will mean that you won't be able to freely transfer back from S&S to cash ISA, and cash like investments are slated to be restricted in S&S ISAs. So you may wish to retain some level of cash ISA.

But there is nothing to stop you using cash like investments in a S&S ISA in the short term to gradually move into higher risk investments over say the next 6 months to a year.

Andme1

Thank you @eskbanker

I dont need any of it for cash. I have access to cash in other accounts for big emergencies and a smaller amount for rainy day emergencies. So I should probably just transfer it all in there, delete the moneybox app and not look at it again for 5 years.

Maybe I dont actually need advice just validation that this is a completely fine and normal thing to do!! 

Andme1

masonic said:

But there is nothing to stop you using cash like investments in a S&S ISA in the short term to gradually move into higher risk investments over say the next 6 months to a year.

What would cash like investments look like vs higher risk ones? 

masonic

Andme1 said:

masonic said:

But there is nothing to stop you using cash like investments in a S&S ISA in the short term to gradually move into higher risk investments over say the next 6 months to a year.

What would cash like investments look like vs higher risk ones? 

"Money market" funds are the most cash like, and will grow steadily in a similar way to a savings account with virtually no ups and downs. The next rung of the ladder is short-duration government bond funds, which can experience gentle declines. If you are using Moneybox, then you should be able to find options among the funds and ETFs they offer. Moneybox have a restricted choice, but I think they have L&G Cash Trust, which is a money market fund.

Andme1

Perfect!! Thank you @masonic

jimjames

Andme1 said:

Maybe I dont actually need advice just validation that this is a completely fine and normal thing to do!! 

It's certainly a normal thing to do if it aligns with your requirements. I have virtually all of my money invested in S&S ISAs, very small amount of emergency funds in cash but that suits me. It might not suit others.

Albermarle

Ive already maxed out this years pension contribution with a lump sum plus my normal monthly payments.

Are you monitoring how your pension is invested ? ( many people do not) .
You might want to take a bit more risk with your pension, as it will presumably not be used up for many decades.
On the other hand a S&S ISA might be a more medium term investment, so perhaps more of a medium risk portfolio might be suitable.

Not knowing your full details, these are only vague suggestions to think about.

topyam

I have maxed out a cash isa. Haven't moved it to a s&s isa, as there won't be the £20k cash isas any more soon. And plan to max out a s&s isa next tax year.