Move money from easy access ISA to Marcus 1 year fix at 4.55%?

MacSue

I'm retired and most of my savings are in ISAs with not so good and likely to fall interest rates. I've always thought the ISA money is there till I need it but at this point does it make sense to lose it's tax free status and move some to make more in the Marcus? 

I do pay tax on my state pension because I didn't take it till 10 years after I was entitled and am currently buying an annuity from my employers pension so will be paying on that too. I have around £50,000 in ISAs and £4000 in easy access. Really need to make what I have work the best for me.

Middle_of_the_Road

There are still decent rates available on ISAs 
Might be a better option to transfer to one of these -
https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/

Stargunner

You can earn up to a £1000 a year in interest from savings accounts tax free if you are s standard rate tax payer. You can therefore work out how much you can take from your ISA to save elsewhere in non isa products that will keep you under the £1000 threshold.

friolento

Middle_of_the_Road said:

There are still decent rates available on ISAs 
Might be a better option to transfer to one of these -
https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/

I agree in principle - but

1. there isn't one that pays 4.55%, and a BR taxpayer can earn £1,000 interest tax free. 4.55% of £21,978 will yield £999.99. The best ISA for this amount would probably be Moneybox @ 4.32% and would pay £949.45.
   Only the OP can tell whether £50 is worth for them to move money out of the ISA wrapper for a year, and then not be able to move the full amount back into an ISA wrapper in one go. 
   
   
2. when transferring an ISA, check the T&Cs. One or two providers now have nasty terms for transfers-in and only pay a much lower than their headline rate for money transferred in. IIRC, Plum and Trading212 are amongst the 'nasties'.

BreakingGlass

The Marcus 4.55% one year fix is no longer available: https://www.marcus.co.uk/uk/en/savings/fixed-term-saver

Albermarle

BreakingGlass said:

The Marcus 4.55% one year fix is no longer available: https://www.marcus.co.uk/uk/en/savings/fixed-term-saver

It was a very good rate and mentioned by Martin Lewis, so presumably they hit their target of new customers/new funds pretty quick. 

AltruisticPie1544

You could also consider drip feeding from your cash ISA into higher paying regular saver accounts and make around 6-7%

MacSue

friolento said:

Middle_of_the_Road said:

There are still decent rates available on ISAs 
Might be a better option to transfer to one of these -
https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/

I agree in principle - but

1. there isn't one that pays 4.55%, and a BR taxpayer can earn £1,000 interest tax free. 4.55% of £21,978 will yield £999.99. The best ISA for this amount would probably be Moneybox @ 4.32% and would pay £949.45.
   Only the OP can tell whether £50 is worth for them to move money out of the ISA wrapper for a year, and then not be able to move the full amount back into an ISA wrapper in one go. 
   
   
2. when transferring an ISA, check the T&Cs. One or two providers now have nasty terms for transfers-in and only pay a much lower than their headline rate for money transferred in. IIRC, Plum and Trading212 are amongst the 'nasties'.

Thanks for your comments and for working out the arithmetic for me, I get stuck with that! I'll have a think about whether it's worth. 

And thanks about the transferring tips. I do have ISA transfer in Trading 212. I really don't like their site but I will go and take a look at their T & Cs

MacSue

BreakingGlass said:

The Marcus 4.55% one year fix is no longer available: https://www.marcus.co.uk/uk/en/savings/fixed-term-saver

Thanks, I opened one last night wit £2000 of my easy access savings but I can still add money for the first 14 days but couldn't work out if it made sense...

Rob_Wills

AltruisticPie1544 said:

You could also consider drip feeding from your cash ISA into higher paying regular saver accounts and make around 6-7%

A great strategy from instant access accounts but be wary of income tax implications from an ISA.

jimjames

If it's flexible ISA then you can withdraw money and repay it if you have a better rate outside (and for £50k that could be beneficial) but it has to be replaced in the same tax year so 1 year fixed rate won't work in that scenario.