What to do when our ISAs mature?

Oblivion

Back in November 2004, my wife and I were pursuaded to take out a Maxi Stocks & Shares ISA with HSBC, and we each put in the maximum £7,000 which has not been added to. They came with a guarantee that if we keep them for 5 years until November 2009, we will get back no less than £7,700 each and possibly more if the FTSE does well.

We are definately going to keep them until Nov 2009 to get the guarantee, but I'm just thinking way ahead to what would be best to do then. I don't want to lose the tax-free status on these ISAs, but I'm not convinced I want to continue in stocks and shares.

Do the ISA rules allow me to change their status from Stocks & Shares to a simple Cash ISA on maturity? Any other tips or thoughts?

Dave.

Baldur

Oblivion wrote: »

Do the ISA rules allow me to change their status from Stocks & Shares to a simple Cash ISA on maturity?

No - Cash ISA funds can be moved into Stocks & Shares ISAs but not vice versa, see HERE.

dunstonh

We are definately going to keep them until Nov 2009 to get the guarantee, but I'm just thinking way ahead to what would be best to do then. I don't want to lose the tax-free status on these ISAs, but I'm not convinced I want to continue in stocks and shares.

Stocks and share ISAs doenst mean you have to invest in stocks and shares. There are other asset classes that can be used.

The investment you chose to use in 2004 was pretty rubbish. So reinvesting it in a similar one on maturity would not be a good thing to do. However, whilst cash ISA is not available to you without losing the ISA status, there are other things you can use.

Oblivion

dunstonh wrote: »

However, whilst cash ISA is not available to you without losing the ISA status, there are other things you can use.

Thanks for your response. Can you elaborate on what "other things I can use" because I am reluctant to lose the tax-free status of these ISAs.

dunstonh

unit trusts being the most common option. You can used fixed interest/bond funds which look attractive at this time. Property funds (which may not be too far off bottom but probably not right now but in Nov..?).

A spread of low risk funds and maybe a smattering of equity income and possibly a higher potential area to give a bit of spice in the mix and match could be the thing to do. Remember risk is not on/off. Its a sliding scale and you can go very low risk on stocks and share ISAs.

Oblivion

dunstonh wrote: »

unit trusts being the most common option. You can used fixed interest/bond funds which look attractive at this time. Property funds (which may not be too far off bottom but probably not right now but in Nov..?).

A spread of low risk funds and maybe a smattering of equity income and possibly a higher potential area to give a bit of spice in the mix and match could be the thing to do. Remember risk is not on/off. Its a sliding scale and you can go very low risk on stocks and share ISAs.

Much appreciated, thanks.