Advice needed about Halifax savings please

Gawain

My mum & dad have got £38,000 in a Halifax ISA Saver and £20,000 in a Halifax Guaranteed Reserve account and are looking to transfer some of the ISA to another bank just in case HBOS goes bust. Can anyone give me any advice about if it's worth transferring, how much to transfer, which account to transfer to, and if there are any fees for transferring out of a Halifax ISA.
Thanks.

johng_uk

My mum & dad have got £38,000 in a Halifax ISA Saver and £20,000 in a Halifax Guaranteed Reserve account and are looking to transfer some of the ISA to another bank just in case HBOS goes bust. Can anyone give me any advice about if it's worth transferring, how much to transfer, which account to transfer to, and if there are any fees for transferring out of a Halifax ISA.
Thanks.

I believe that the figure at which you receive 100% compensation should a banking institution go bust is £35,000, therefore they would need to transfer £23,000. There are various questions that would need to be asked before anyone on here could give you detailed advice (and there are many others more qualified than myself). Questions such as:

1) How much access do they require to the cash?
2) Have they used up this years ISA allowances?
3) Which Halifax ISA Saver are they with? As there is the fixed rate saver - 6.2% and fixed for 4 years, ISA saver dircet - 5.25% and the variable rate ISA saver - 3.51?
4) Are they investing for the mid-long-term (i.e. 5 years+) and would they be adverse to stock market exposure.
5) Will the money possibly be required in the short-term? If so, fixed rate deals would be a better option than the stock market.
6) What ages are your parents and are they both taxpayers? If so are they on the lower or higher rate of tax?

If you can get some of this information then the financial whizzes on here may be able to point your folks in the right direction.

Cheers:p

Gawain

Not 100% sure aboout all of this but:
1) Dad's still working and Mum's on pension so keeping it for old age
2) Not used this years allowance yet but looking at Barclays ISA for that
3) Don't know, it just says Halifax ISA Saver on statement
4) They don't want to take the risk of stocks, looking for safe, cash only investment
5) Dad should still be working for a few years, so should be left untouched for a while
6) Dad's 62 & Mum's 61 (in receipt of state & work pensions)

Hope this is useful, ta.

Mikeyorks

They're covered up to £35k each (therefore up to £70k in total) .... if they've apportioned the money.

But you need to determine if it's the fixed rate ISAs (must be in separate names! .... your original post implies 'joint' ..... and it can't be). As there's a significant penalty (180days interest) for moving before the 'fix' ends.

But if its the variable rate ISA (circa 4% on tiered rates) or the Direct ISA (5.25%) .... they should be considering a move anyway, as there are better rates (look for 6.25%) to be had. No fees for transferring either .... and they should be looking to transfer the lot ... if the £38k is reasonably split between them?

johng_uk

Not 100% sure aboout all of this but:
1) Dad's still working and Mum's on pension so keeping it for old age
2) Not used this years allowance yet but looking at Barclays ISA for that
3) Don't know, it just says Halifax ISA Saver on statement
4) They don't want to take the risk of stocks, looking for safe, cash only investment
5) Dad should still be working for a few years, so should be left untouched for a while
6) Dad's 62 & Mum's 61 (in receipt of state & work pensions)

Hope this is useful, ta.

1) I guess they don't mind having limited access, so fixed rate savings accounts are an option.

2) I used the Barclays ISA this year as it seems to be the top payer at 6.5% AER - Be aware that they don't allow transfers from a previous years ISA and any investment has to be 'new money'. Also, be aware that the limits have risen from £3000 to £3600 for each cash ISA investment this year. I would also fill up my ISA before any other investment as the capital + interest is then tax free even if your folks circumstances change.

3) It would be advisable to find this out as there are better paying rates around. 3.51% is pitiful and 5.25% can be easily bettered. Alliance and Leicester both offer 6.25% ISA's which allow money transfers in. Therefore, they could open an ISA each (£3600 x 2) and transfer in their previous ISA balances also. They obviously couldn't do this and open up the Barclays ISA at the same time!!

4) There are various high paying savings accounts around. Check: http://www.moneysupermarket.com for comparison tables. There were rumours on this site, branded scaremongering by many, about the Icelandic banks Kaupthing Edge and the other (who's name escapes me). I avoided these as I am saving for a house deposit and wanted the least risk possible. ICICI is an Indian bank which pays 7%. I avoided this also with no hard and fast reason for doing so. I plumped for Birmingham Midshires who pay 6.81% for a fixed rate 1 year bond.

5) You have already stated that they wish no stock market exposure - Question answered lol!

6) There is an option to file an R85 and get your investments free of tax (depending on how much earnings you make + earnings on investments). I'm not sure where your Mother would fall in this as it would depend on her pension earnings. I wouldn't like to comment although there will no doubt be someone along soon, who can explain the intricacies of pensions etc.

Also it may be worth your Dad topping up his pension depending on his pension pot/retirement date etc. Just another option worth mulling over, personal circumstances dependant of course.

Hope this helps.:p

Meltdown_2

johng_uk wrote: »

I plumped for Birmingham Midshires who pay 6.81% for a fixed rate 1 year bond.

Perhaps worthwhile mentioning at this point (to anyone new) about the rather strange rule whereby monies held in any of Bank of Scotland, Halifax, Birmingham Midshires, Intelligent Finance, Saga, or the AA are all treated as the same institution when assessing the £35,000 limit.

Further info in the MSE article below :
http://www.moneysavingexpert.com/savings/safe-savings

johng_uk

Perhaps worthwhile mentioning at this point (to anyone new) about the rather strange rule whereby monies held in any of Bank of Scotland, Halifax, Birmingham Midshires, Intelligent Finance, Saga, or the AA are all treated as the same institution when assessing the £35,000 limit.

Good point mate and well presented. I'd forgotten this!