Advice on ISA's

Artsoul

Hi Folks,

Hope you are all well and many thanks for any replies. I had a search of the forum for answers and struggled to find any for this question so apologies if its been asked already.

Ok so I've got an ISA i opened last year at the full amount ( 20k ) and it's going to be hitting it's end of year. I'm under the impression that I can open another ISA and still keep the tax free allowance for last years ISA ……… is this correct?

So last years ISA do I have to keep it with the same provider? Or can I find an alternative that has a better rate?

Basically I'd like to move last year's ISA elsewhere and still open an ISA for this year.

slinger2

Yes, you have £20k of new money you can add each tax year. So you can open another ISA and put £20k in it.

Yes, you can move an ISA to another provider. This is done by a transfer initiated by the new provider. Don't withdraw the money and move it yourself.

There are some important things to know about ISAs but fundamentally a Cash ISA is a savings account. You can open 10 of them if you wish as long as you don't exceed your annual allowance. You can add to existing Cash ISAs, as long as the T&Cs of the account allow it.

flaneurs_lobster

Basically I'd like to move last year's ISA elsewhere and still open an ISA for this year.

Yep, that's fine (but beware of that word "move", think you mean transfer).

You can fund ISAs with £20k of new money in each tax year (next year the rules change).

The new ISA can be with anyone you like.

The old ISA can be TRANSFERRED to any other ISA with anyone that allows transfers in.

Valli

https://www.gov.uk/individual-savings-accounts/how-isas-work

Albermarle

https://forums.moneysavingexpert.com/discussion/6686113/advice-on-isas

 I had a search of the forum for answers and struggled to find any for this question so apologies if its been asked already.

The search facility is rather poor.

If you spend an hour or two just scrolling through the forum, looking at questions and answers, you will know more about ISAs than you ever thought possible !

Clive_Woody

https://forums.moneysavingexpert.com/discussion/6686113/advice-on-isas

Thing to note is that the ISA allowance is per Tax year and doesn't run from when you first paid money in. Theoretically you could pay in £20k at the of March and then a couple of weeks later pay in another £20k (different tax years).

When moving your ISA do not withdraw the money but instead chose your new provider, checking that they allow transfers, then start the transfer process with them. If you take the money out as cash then you cannot retain the previous years allowance (i.e. use the transfer process offered by your new provider).

RobM99

The £20,000 limit applies to per tax year (April 6 to April 5 - or very similar!).

If you want to move to a better rate with a different bank, ask the new provider to do it for you, if you withdraw and put back in, that counts as 'new money' and uses up your allowance - so don't! A transfer by new provider is the proper way - so do that.

t0rt0ise

Just to be clear you don't have to have a different ISA for each year. You could open a new one somewhere, transfer your old one in and add new money to that same ISA if you like. Or you can keep them in separate ISAs if you like, it's up to you.

friolento

https://forums.moneysavingexpert.com/discussion/comment/82164745#Comment_82164745

it’s up to you and also up to the new ISA’s T&Cs. Not all ISAs allow transfers in, and one or two which do allow it pay a much lower than the headline rate on transferred in money.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82164986#Comment_82164986

That is not correct. Most ( not all) Cash ISAs allow transfers in, and in fact actively encourage it.

Most of these pay the same interest rate for transfers, as they do for new money.

Some of the new kids on the block, offer top headline rates, but do often have disadvantages such as paying lower interest rate on transfers, but most providers do not do this.

friolento

https://forums.moneysavingexpert.com/discussion/comment/82165178#Comment_82165178

You have essentially just repeated what I already said. Just because you prefer to say it in your words doesn't make what I said "not correct".