tessa only isa ???

chesky369

In the 90s I managed to scrape together a couple of thousand to save in a Lloyds TESSA, which I transferred to its Tessa-only ISA in 2004.

Nowadays I use my whole ISA S&S allowance of £7k, so I’ve always got this little Toisa hanging around, annoyingly. The interest rate is 4.25% and I’m seriously thinking of jacking it in and transferring it to an ordinary high rate savings account because, even allowing for tax, I’m sure I could do better.

Or can I transfer it to another ISA without eating into my £7k S&S allowance? If so, which one?

RayWolfe

You can keep it or transfer it. Most providers treat a TESSA as an ISA these days and next tax year they will have to.

JohalaReewi

Take a look at Skipton BS and/or Kent Reliance BS. Last time I looked, their Tessa only ISAs were up in the 6% band. You should be able to do a transfer and so not lose your tax free status or use up this year's allowance.

DeepSporran

Also note that from this April, you can transfer a cash or TESSA ISA into a S&S ISA, which might suit you if you have sufficient cash deposits elswhere.

chesky369

thanks deepsporran - didn't know that. Looks the most sensible thing to transfer it, plus a further £5k to make up the difference. It'll almost seem like saving money.

DeepSporran

You can subscribe the full £7000 to an S&S ISA next year, and still transfer the TESSA ISA across to an S&S ISA as well. You won't have to restrict your new subscription to £5000.

isasmurf

TESSA only ISAs are Cash ISAs. Anyone that tells you different don't know the rules

DeepSporran

isasmurf wrote: »

TESSA only ISAs are Cash ISAs. Anyone that tells you different don't know the rules

Not sure who you mean is telling it different ?

TESSA only ISAs are indeed Cash ISAs.

Also, from April 2008, unless something has changed recently that I haven't heard about (quite possible ! :embarasse) Cash ISAs should be able to be transferred into S&S ISAs.

http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2007/press_15_07.cfm

"....allowing transfers from the cash component of ISAs into the stocks & shares component to encourage savers to diversify their assets and further promoting share ownership; ...."

roddydogs

If i have a "Tessa" ISA can i transfer this to a cash ISA without it affecting the amount i can put into a "Cash" ISA? Dont want anything share based, thanks

DeepSporran

roddydogs wrote: »

If i have a "Tessa" ISA can i transfer this to a cash ISA without it affecting the amount i can put into a "Cash" ISA? Dont want anything share based, thanks

Yes, no problem with doing this. You can still subscribe new money into a Cash ISA up to the maximum (£3000 this year, £3600 after April), as well as transferring any money subscribed in previous years (i.e. your TESSA money).

Usual warnings apply - make sure you do a TRANSFER of your TOISA, don't just withdraw the cash and then try to re-deposit it in your new supplier's Cash ISA.