Cash ISA total over FSCS limit

Ratewatcher · 22 May 2018 at 8:28AM

I have been saving my ISA allowance nearly every year since they began. I am now over the FSCS limit and my money is at risk I really wish the government would allow you to split your savings between 2 cash ISA's. I do not want to take the risk of a Stocks/Shares cash ISA

I am surprised none of the financial websites have produced articles regarding this - or have I missed them?

There seems to be no solution to this problem

Alter_ego · 22 May 2018 at 8:31AM

You can split it over as many cash ISAs as you like. Just only fund one each financial year.

No such problem exists.

AirlieBird · 22 May 2018 at 8:33AM

You can split your ISA between as many cash ISAs as you like. The only condition is that all current tax year deposits must be held together in the same cash ISA.

Edit to add: remember to use the official isa transfer process when doing a partial transfer by asking the new provider to transfer the money for you.

Ratewatcher · 22 May 2018 at 3:27PM

This is from The Telegraph Financial Solutions page (see below) - I do not want any other type of ISA - only Cash ISA. My fixed rate ISA from 2017/2018 (and numerous other years) has just matured into an easy access ISA. So are you saying I can open a fixed rate Cash ISA 2018/2019 - transfer part of my old ISA allowances into it . Then open another fixed rate Cash ISA - transfer the rest of my old ISA allowances into it plus the new investment of £20k this year?

As long as your total tax-free savings in 2017/18 are no more than £20,000, you can split them across a combination of cash ISA, investment ISA, or innovative finance ISA savings. However, they would have to be different types of accounts, meaning for example you can!!!8217;t invest in two cash ISAs in the same tax year. So you can definitely have more than one ISA per year - they just have to be different types of ISAs.

AirlieBird · 22 May 2018 at 4:01PM

The 'one ISA of each type' rule only applies to the money you put in during the current tax year. Once the tax year has ended you can separate this money into as many cash ISA accounts as you want.

https://www.moneysupermarket.com/isas/cash-isa-questions/

Can I have more than one ISA?
You can have multiple ISAs, but you can open only one cash ISA in each tax year.

So, if you have opened a cash ISA since April 6, 2017, you cannot open another one until April 6, 2018.

Note, however, that transfers from previous years’ ISA funds don’t count. So even if you have opened a cash ISA this tax year and paid new funds into it, you can still transfer funds from previous cash ISAs into another ISA account – so long as you don’t top it up.

jimjames · 22 May 2018 at 4:22PM

If you've been saving that amount of cash since 1999 then you may want to look at other options for part of it too. But as above there is no reason why all the money needs to be in one place

Ratewatcher · 22 May 2018 at 9:54PM

Thats great news - I phoned HMRC up about a year ago and they definitely indicated that it wouldn't be possible to do what I wanted - perhaps they misunderstood

Ratewatcher · 23 May 2018 at 6:31AM

JimJames - I know we should look at other options but my husband is retired and doesn't feel he wants to take any risk - I should mention I also have numerous regular savers.

david78 · 23 May 2018 at 8:00AM

You can definitely have money in as many cash ISAs as you like (I have several). If you think about it this must be the case because otherwise there would be no need for the clause in the regulations that says "cash ISAs from previous years can be transfered in full or in part".

To split your Cash ISA you just need to open a new cash ISA (with someone with a separate FSCS licence) and then get the new provider to make a partial transfer. You can split into as many accounts as you want.

eskbanker · 23 May 2018 at 10:15AM

LisaWhite wrote: »

JimJames - I know we should look at other options but my husband is retired and doesn't feel he wants to take any risk - I should mention I also have numerous regular savers.

Not an uncommon stance, but it's flawed thinking that staying in cash is a no-risk option, when it's highly likely to lose value to inflation, so not investing isn't avoiding risk altogether, it's just substituting one type of risk with another.

david78 wrote: »

To split your Cash ISA you just need to open a new cash ISA (with someone with a separate FSCS licence) and then get the new provider to make a partial transfer. You can split into as many accounts as you want.

Perhaps worth clarifying that not all cash ISAs accept inbound transfers so if/when you go down this route, ensure that you choose products that will allow transfers in....

Ratewatcher · 4 July 2018 at 12:26AM

Thanks everyone - I have split my ISAs

Cash ISA total over FSCS limit

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free