Full ISA Guide Discussion Area

SFA_AOK

I've taken advantage of some time between jobs to read about ISAs, and to sort myself out for this year.

A couple of points I'm still hazy on:

- Someone on the previous page talked about withdrawing money and losing some of their allowance for the year. I'm also confused on the ISA guide's golden rule:

"Never, ever, ever, ever withdraw money from a cash ISA! You'll immediately lose all the tax benefits."

Am I right in thinking both of these basically boil down to: if you put £2000 (leaving you with £1600 at this years allowance) into an ISA then later withdraw £1000, you still only have £1600 to put into the ISA, not £2600?

- I've just opened a new ISA. If I pay into this on 7th April next year, I won't be able to open a new ISA for tax year 2010/11. How do people balance paying into an existing ISA versus keeping the money out of an ISA in case something better comes along and deciding later in the year? I know this will be a matter of opinion, and expect their will be a range of opinions

The reason I ask is that over the coming year, I hope to have a decent amount leftover from my salary to put into savings. If I start putting it into the ISA (option 1) I've just opened, the rate will drop in 12 months time (just before the end of 2010/11) and I won't be able to open a new ISA with a better rate 2010/11 tax year. Do banks let you open ISAs in one tax year for the next tax year? If so, I can pick the best deal at the end of the 2010/11, but have it start at the start of 2011/12.

Option 2 is that I put the money aside in a regular savings account until the end of the next tax year and open a new ISA then and put the money I've saved over the year into the ISA.

This also raises the question - do the better deals usually appear at the end of the tax year? For some reason I think this is the case, but I don't know why, and this could be a false assumption.

- Finally, are there any limits (other than account terms and conditions) on transferring ISAs within a year? Could I transfer an ISA to one bank, then transfer it again to another bank a few months later (and within the same tax year)?


Sorry for the long post, and thanks in advance for any help

phil46

i dont have any money in an ias yet, but want to put 3600 in before this years allowance runs out, i already have a hsbc bank account so for ease would it be possible to open an isa with them and then move it to a better paying one when i have more time to learn about which is the best! would they charge me for this?

thanks i know nothing about this and im confoosed!!:undecided

RayWolfe

Good idea for speed. No charge. You can do it online.

brianpals

Hi
I've used ISAs for a few years now. However, I'm still not convinced that they are the best place for my savings.
Although Martin says an ISA is "...the first place to put your cash." why is it better than a fixed interest savings account offering over 1% more? I'm on a basic tax rate band so surely this would produce a higher return even after tax is paid?

Petergmorgan_2

For 2010/2011 can I use my ISA allowance through two providers eg one for a £3000 cash Isa and another for a £7,200 DIY ISA or can ISAs only be through one provider?

RayWolfe

Yes you can but not two Cash or S&S providers.

moneynewbie

can i open the top ISA, say Abbey flexible or Barclays Golden ISA, for this year's allowance, and the top ISA that allows transfers in, say Nationwide, to transfer in previous year's ISA please?

rb10

moneynewbie wrote: »

can i open the top ISA, say Abbey flexible or Barclays Golden ISA, for this year's allowance, and the top ISA that allows transfers in, say Nationwide, to transfer in previous year's ISA please?

Yes, you can do that.

Mickygg

brianpals wrote: »

Hi
I've used ISAs for a few years now. However, I'm still not convinced that they are the best place for my savings.
Although Martin says an ISA is "...the first place to put your cash." why is it better than a fixed interest savings account offering over 1% more? I'm on a basic tax rate band so surely this would produce a higher return even after tax is paid?

This is possible at the moment when rates are low. The main benefit of ISA's is when you build up a nice little amount. For example some people are now seeing £50k, and there is a rate at the moment of 4% (of 4.8% for a BR taxpayer) with M&S that is fixed for 3 years with a flat fee of £100 if you want to withdraw this. I can't think of a savings account that can beat this. Also Nationwide up until recently offered 4.4% fixed for 3 years, equivalent to 5.28% for a BR taxpayer - again no deposit account can match this.

Petergmorgan_2

I'm still new at this.
When a dividend is paid into a shares ISA or interest into a cash Isa are these payments paid net of basic rate income tax requiring a reclaim from the Inland Revenue or are the payments made gross?