ISA Transfer Advice

Heytheremrblue

So this is all new to me ….

Myself and my other half both have ISA's that mature in early November.

I have 20k and she has 12k.

The plan is to transfer 20k each from her Premium Bonds into a new ISA before this new limit kicks in.

The ISA's are with a very well know Bank that is in most high streets.

The ultimate plan is to transfer as much as we can over the next 10 years so when the State Pension kicks in we are not hammered by tax. I retired a couple of years ago the Wife is still working.

It would be nice if the ISA paid the interest monthly.

BUT

I'm not 100% sure how it works … I know the ISA must stay within the wrapper to be transferred to another ISA and I believe when our ISA's mature they revert to the banks kind of default ISA I think ……

So what will be my best way of going about transferring to another ISA with a decent interest rate because I assume my banks rate will be rubbish !

Albermarle

So what will be my best way of going about transferring to another ISA with a decent interest rate because I assume my banks rate will be rubbish !

You find a cash ISA with a decent interest rate. ( easy access or fixed) Open it and as part of the opening process request that your other ISA is transferred in.

Big banks tend not to have the best interest rates. Do you not know what the interest rate is? Here is one comparison site. It also includes some info about ISA's generally.

The UK's Best ISA Rates | Compare & Apply

I would kindly suggest that you would be wise to get more up to speed with ISA rules etc.

If you read this link and then also read through this forum, that should help.

Best cash ISAs: up to 4.75% easy access, up to 5.25% fixed - MSE

jimjames

It would be nice if the ISA paid the interest monthly.

I assume you want that to be able to withdraw the interest, if not then annually will just build up in the account? Bear in mind that withdrawing the interest means the total you have tax free will be reduced, interest can be added and continue to build up that tax free pot if you don't need the money until retirement. Otherwise you'll have more money outside the ISA that needed especially if you are trying to get as much in as possible.

Heytheremrblue

Thank yeah use the interest as part of our monthly income I've already retired. I need to max out the ISA's over the next 10 years until state retirement age.

jimjames

https://forums.moneysavingexpert.com/discussion/comment/82166217#Comment_82166217

If that's the case then you might want to use the money outside the ISA as income and keep the interest inside. It will give you a higher tax free pot long term.

Say £20k in ISA, £50k in PB and 5% interest-no account taken of ISA changes.
End of year 1 you have earned £1k interest and can now add another £20k to the ISA. If you pay interest out monthly you would have £40k in ISA and £30k in PB and £1k cash from interest. If you keep interest inside ISA instead you would have £41k in ISA, £29k in PB by taking the £1k from them not ISA.

Every year the ISA balance is higher by keeping interest inside it makes even more difference. After year 2 interest is £2050 so you've now got £3050 more inside your ISA and £3050 less in taxable money. It just means you need to get your head round using capital as income to get that money in the ISA. It could mean you have over £30k more inside the ISA after 10 years, all generating tax free income.