Cash ISA palaver (my mistake)

ispectra

With £52,000 to place into a savings account which would allow one or two penalty-free accesses a year, I opened a Virgin Money Double-Take E-Saver and, because my nominated account provider only allows £25k payment out per day, successfully transferred the first £25k over. The next day I tried to move another £25k and it repeatedly failed.

Today I've spotted that I'd mistakenly opened a Virgin Money Double-Take E-ISA, rather than the non-ISA E-Saver. I've now withdrawn the £25k which has already earned £8 interest, back to my current account. At least now I've got my full £52k back again and can choose another account and/or provider.

But having done the above, have I officially used my 2026-27 ISA allowance? If in a few months I go to open a 26-27 Cash ISA and am asked 'Have you already opened a Cash ISA this year?, how should I answer? I guess the answer's Yes and I can't proceed, in theory, but I cancelled and closed it within 2 days of opening it.

Grateful for any views. Thank you.

eskbanker

I cancelled and closed it within 2 days of opening it

If you cancelled it, as opposed to just emptying it, then that voids it as if it never happened and you can declare that you haven't opened one this year, and you'll retain your current year contribution allowance.

Albermarle

It depends if the Virgin ISA is a flexible one.

With a flexible ISA, you can withdraw money from it and as long as you put it back before the tax year ends it retains its ISA status. If it is money deposited this tax year, you can in fact just open a new ISA and deposit it back into there.

If it is not a flexible ISA, you can not do this and you will have used up your £20K allowance already.

I am not sure what happens though if you deposit in an ISA and then cancel within the cooling off period, whether you get the allowance back.

If in a few months I go to open a 26-27 Cash ISA and am asked 'Have you already opened a Cash ISA this year?, how should I answer?

This is not the issue as you can open as many cash ISAs as you like in a tax year. The issue is whether you have used up your £20K allowance or not.

Picnicker

Are you sure it was an ISA if you managed to put £25k into it when the annual allowance is only £20k?

ispectra

Thank you @Albermarle I've checked and the Virgin Double-Take E-ISA isn't flexible. They seem to have an alternative account for that, called the 'M Access ISA'.

@Picnicker Thank you. Yes, I wondered that when I twigged that it was an ISA I'd opened: why have you let me deposit £5k over the limit? I double-checked and got someone else to look at my screen and it was definitely their 'Double Take E-ISA that I'd opened.

I'll have to try and find out whether those few days I had it open 'count'.

ispectra

@eskbanker Thank you. I may have used the wrong word there in saying I 'cancelled it'. I just followed the option in the Virgin portal to 'close this account', whereby all the money including a couple of days' interest would be paid back to my nominated account (current a/c with another provider) and it came through within an hour or so.

So I'm not sure I can count on that option you describe, unfortunately.

eskbanker

Have you followed their published cancellation process?

If you are not happy with your choice of account within 14 days of depositing your ISA subscription, we will help you close your account and you will not lose your right to invest in another Cash ISA, Stocks and Shares ISA, Innovative Finance ISA or Lifetime ISA for that tax year. If you wish to take advantage of this 14-day rule, you must send your cancellation in writing to Savings Operations, Virgin Money, Jubilee House, NE3 4PL, when you close your account we will ensure that our reports to HM Revenue & Customs reflect the correct position. If you do cancel your account, the full amount of your investment, together with any interest earned will be returned to you.

Edit: cross-posted - maybe worth contacting them now to see if it's still viable?

ispectra

@eskbanker Thank you so much. I hadn't thought to look for that. I'll write to them and ask if they can apply that cancellation retrospectively as it were. They may say no, but it's worth a try.

If I get anywhere I'll post an update here.

friolento

What are the dates involved? You should have a 14 day cooling-off period, during which you can close the account without any negative consequences. You'd probably have to write to the right Virgin department, not their normal CS.

ispectra

Thanks @friolento I only had it open for three days. I've just written to that department in your screenshot to ask them to retrospectively cancel the ISA. Fingers crossed!

35har1old

https://forums.moneysavingexpert.com/discussion/6663926/cash-isa-palaver-my-mistake

How did they let you make a £25000 deposit into a ISA. Money should have been returned with a note saying you have exceeded the maximum allowed for this year