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  • FIRST POST
    • Spadge64
    • By Spadge64 22nd Mar 18, 12:13 PM
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    Spadge64
    Paying into ISAs with different providers
    • #1
    • 22nd Mar 18, 12:13 PM
    Paying into ISAs with different providers 22nd Mar 18 at 12:13 PM
    Hi fellow MSE-ers

    I'm really hoping someone can help as I've exhausted all my options. I've done lots of research, am getting conflicting advice from the 2 building societies involved and have phoned the HMRC ISA helpline and they can't help, even though I'm questioning HMRC rules and regs!

    I have a Loyalty Cash ISA and a Help to Buy ISA with Nationwide. They let you split your payments so you can pay into 2 'cash' ISAs, so have paid into both this tax year.

    I have transferred my Help to Buy ISA to Skipton's Lifetime ISA. I wanted to transfer the full amount, but Nationwide said I can't split the current year's subscription between 2 providers and as I'd paid into my Loyalty ISA with them and would be transferring this year's contributions from my H2B ISA to Skipton, they could only transfer last year's payments to Skipton. So I've done that and left this year's payments in the H2B.


    But then I've paid into my Skipton Lifetime ISA to make sure that I use this year's 4k allowance with them. Have I inadvertently broken the rules because I've paid into a Nationwide Cash ISA and my Skipton LISA in the same year? I know you are allowed to pay into a Cash ISA and LISA at the same time, as they are different types of ISAs, but I'm now not sure about the 'different providers' issue.


    Not only do I need to know this for this tax year, but also for next tax year. Next tax year, I planned on contributing to all 3 (though not exceeding the 20k combined limit, obviously). But if I can't pay into 2 different providers at the same time, then I need to figure out whether to pay into the Skipton LISA (which has a 4k limit) or the ISAs I have with Nationwide (so I can utilise the full 20k allowance).


    I'm so confused and feel like I'm against the clock. If anyone who understands this better than I do can advise, please do so...I'd be extremely grateful as I don't know where else to turn...feel like I'm going round in circles getting myself even more confused!
Page 1
    • eskbanker
    • By eskbanker 22nd Mar 18, 12:59 PM
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    eskbanker
    • #2
    • 22nd Mar 18, 12:59 PM
    • #2
    • 22nd Mar 18, 12:59 PM
    Have I inadvertently broken the rules because I've paid into a Nationwide Cash ISA and my Skipton LISA in the same year? I know you are allowed to pay into a Cash ISA and LISA at the same time, as they are different types of ISAs, but I'm now not sure about the 'different providers' issue.
    Originally posted by Spadge64
    You haven't broken any rules (and wouldn't next year either if you continued to do the same) - there is no issue with using different providers for the different types of ISA, so theoretically you could be paying into one provider's LISA, a second provider for cash ISA, a third for S&S and a fourth for IFISA, all in the same tax year.
    • bowlhead99
    • By bowlhead99 22nd Mar 18, 2:42 PM
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    bowlhead99
    • #3
    • 22nd Mar 18, 2:42 PM
    • #3
    • 22nd Mar 18, 2:42 PM
    All your current year cash ISA money is with one provider(albeit, split across two account numbers, but Nationwide will refer to it as just one big cash ISA, when discussing how many current year cash ISAs you have with HMRC). So your cash ISA has maintained its integrity.

    All your current year LISA money is with one provider. So that's fine too.

    Next year, you can continue to do same if you like (although, be aware Nationwide's flex regular saver pays 5% on 250pm, so just in case you are not also using that, it's a better home for new money than the HTB ISA at only 200pm and a lower interest rate).
    • Spadge64
    • By Spadge64 23rd Mar 18, 1:50 PM
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    Spadge64
    • #4
    • 23rd Mar 18, 1:50 PM
    • #4
    • 23rd Mar 18, 1:50 PM
    Thanks both for your replies. I feel reassured that what I've done is legitimate and what I plan to do will be allowed. I'm just confused as to Nationwide's advice that they could not transfer this year's subscriptions of my H2B ISA to Skipton's LISA. I'm going into branch this afternoon armed with your assurances to try and get an explanation that I understand!


    And regarding the Nationwide Flex Regular Saver, yes I have that already and am paying into it monthly :-)
    • eskbanker
    • By eskbanker 23rd Mar 18, 2:02 PM
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    eskbanker
    • #5
    • 23rd Mar 18, 2:02 PM
    • #5
    • 23rd Mar 18, 2:02 PM
    Just to be clear Nationwide were/are right when they "said I can't split the current year's subscription between 2 providers and as I'd paid into my Loyalty ISA with them and would be transferring this year's contributions from my H2B ISA to Skipton, they could only transfer last year's payments to Skipton".

    In other words, you haven't broken any rules at the moment and won't be doing so next year, but you can't split current year contributions once they've been made, so can't transfer current year HTB money while leaving other current year cash ISA money behind in Nationwide....
    • GeorgeEade
    • By GeorgeEade 1st Aug 18, 1:02 PM
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    GeorgeEade
    • #6
    • 1st Aug 18, 1:02 PM
    • #6
    • 1st Aug 18, 1:02 PM
    I think I'm having a similar problem to OP. I have a Nationwide ISA and a Skipton LISA. This tax year I accidentally deposited the full 20k allowance into the ISA, when I meant to split it between the ISA and the LISA. Since then I've been trying to move 4k from the ISA to the LISA, but Nationwide are saying this is not allowed. What are my options now?
    • masonic
    • By masonic 1st Aug 18, 7:10 PM
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    masonic
    • #7
    • 1st Aug 18, 7:10 PM
    • #7
    • 1st Aug 18, 7:10 PM
    I think I'm having a similar problem to OP. I have a Nationwide ISA and a Skipton LISA. This tax year I accidentally deposited the full 20k allowance into the ISA, when I meant to split it between the ISA and the LISA. Since then I've been trying to move 4k from the ISA to the LISA, but Nationwide are saying this is not allowed. What are my options now?
    Originally posted by GeorgeEade
    "ISA flexibility is available on all Nationwide cash ISAs (except our Smart Junior ISA)."

    When you flexibly withdraw money that you subscribed to your cash ISA in the current tax year it is treated as if it were never paid in and you can repay it into any other type of ISA you hold. So you can simply withdraw 4k and pay it into your LISA. Confirm this with Nationwide before proceeding, but that's how ISA flexibility should work according to HMRC.

    Edit: it's also exactly what Nationwide says in their FAQ here:
    https://www.nationwide.co.uk/support/support-articles/faqs/isa-flexibility-faqs#xtab:what-happens-if-i-have-multiple-isas-with-nationwide
    Last edited by masonic; 01-08-2018 at 7:13 PM.
    • GeorgeEade
    • By GeorgeEade 5th Aug 18, 7:09 PM
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    GeorgeEade
    • #8
    • 5th Aug 18, 7:09 PM
    • #8
    • 5th Aug 18, 7:09 PM
    Thanks for the reply. The problem is that I'm trying to transfer between providers. My ISA is with Nationwide and my LISA is with Skipton, so I don't think Natiowide's ISA flexibility applies here.


    From what I understand, you can fund two different types of ISA across two different providers within the same tax year, so normally I could just pay 16k to the Nationwide ISA and 4 to the Skipton LISA. The issue I'm having is that it seems you can't split a current year's contributions between providers once they've already been made, like @eskbanker said above.


    Nationwide have told me I can move all of the current year subscriptions I made to their ISA (20k) to the Skipton LISA, just not part of it, but that's not ideal.


    Any suggestions on how I can achieve the split I'm after?
    • masonic
    • By masonic 5th Aug 18, 8:55 PM
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    masonic
    • #9
    • 5th Aug 18, 8:55 PM
    • #9
    • 5th Aug 18, 8:55 PM
    Thanks for the reply. The problem is that I'm trying to transfer between providers. My ISA is with Nationwide and my LISA is with Skipton, so I don't think Natiowide's ISA flexibility applies here.
    Originally posted by GeorgeEade
    The key is that you don't transfer between providers. You flexibly withdraw from one (Nationwide) and pay that money into the other (Skipton).

    From what I understand, you can fund two different types of ISA across two different providers within the same tax year, so normally I could just pay 16k to the Nationwide ISA and 4 to the Skipton LISA. The issue I'm having is that it seems you can't split a current year's contributions between providers once they've already been made, like @eskbanker said above.
    That's incorrect. ISA flexibility allows you to remove money you've paid into an ISA during the current tax year and, as if by magic, it is treated as never having been paid in. So you can then pay it into a different type of ISA with a completely different provider should you choose. If you pay 20k into Nationwide, then flexibly remove 4k and pay that into Skipton, then it is treated identically to the situation where you just paid 16k into Nationwide to begin with.

    Nationwide have told me I can move all of the current year subscriptions I made to their ISA (20k) to the Skipton LISA, just not part of it, but that's not ideal.
    It's not ideal and it's also not possible owing to the LISA limit of 4k. It does seem that the person you are speaking to at Nationwide might not be fully up to speed on what is and isn't allowed. But they are correct that if they initiate a transfer on your behalf they must transfer the current year subscriptions in full, which of course cannot be done to a LISA if you've paid in more than 4k.

    Any suggestions on how I can achieve the split I'm after?
    Do as suggested in my previous response.
    Last edited by masonic; 05-08-2018 at 9:01 PM.
    • Reed_Richards
    • By Reed_Richards 6th Aug 18, 9:12 AM
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    Reed_Richards
    "ISA flexibility is available on all Nationwide cash ISAs (except our Smart Junior ISA)."

    When you flexibly withdraw money that you subscribed to your cash ISA in the current tax year it is treated as if it were never paid in and you can repay it into any other type of ISA you hold. So you can simply withdraw 4k and pay it into your LISA. Confirm this with Nationwide before proceeding, but that's how ISA flexibility should work according to HMRC.

    Edit: it's also exactly what Nationwide says in their FAQ here:
    https://www.nationwide.co.uk/support/support-articles/faqs/isa-flexibility-faqs#xtab:what-happens-if-i-have-multiple-isas-with-nationwide
    Originally posted by masonic
    My reading of what Nationwide says is different. All the Nationwide ISAs are cash ISAs of one sort or another. So if you invest in a Nationwide cash ISA you can put money into more than one of their ISA "wrappers" and move it around. But if you withdraw ISA money from Nationwide that's a different situation completely. I doubt it can go to another ISA provider.
    Reed
    • Gordon the Moron
    • By Gordon the Moron 6th Aug 18, 9:53 AM
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    Gordon the Moron
    This is a little confusing for ISA newbies. I haven't time to read the whole thread ignore this if it's been fully explained already.

    You can only pay into 1 cash LISA per tax year (I'm guessing you can split the 4k LISA allowance between cash and S&S though I've not tried)

    You can only pay new money into 1 stocks and shares ISA per year.

    You can pay into 1 IFISA per year.

    You can only pay into 1 cash ISA per year.

    All of the above are separate (though the total 20k limit applies)

    The issue with Nationwide is unlike Lisa, Help to Buy ISAs are not considered a different account type to cash ISA which is why you need a provider that allows splits to use one.

    This leads to the stupid situation you've encountered. You can perfectly legally pay into a cash ISA for this year and LISA but you can't transfer from cash ISA to LISA (unless it's all of both accounts, cash and H2B)

    If you know about it though it's a non issue as there's nothing to stop you flexibly withdrawing from Nationwide to fill the Lisa.
    If you don't like what I say slap me around with a large trout and PM me to tell me why.

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    • masonic
    • By masonic 6th Aug 18, 12:53 PM
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    masonic
    My reading of what Nationwide says is different. All the Nationwide ISAs are cash ISAs of one sort or another. So if you invest in a Nationwide cash ISA you can put money into more than one of their ISA "wrappers" and move it around. But if you withdraw ISA money from Nationwide that's a different situation completely. I doubt it can go to another ISA provider.
    Originally posted by Reed_Richards
    There seems to be some confusion between Nationwide's "Split ISA" offer, and the ISA flexibility introduced a couple of years ago in the ISA regulations.

    What Nationwide says does not override a customer's statutory rights. If Nationwide chooses to offer the flexible withdrawals (it can choose not to, but it has chosen to offer them), then any money flexibly withdrawn that relates to the current tax year must by law not be counted towards the annual limit. This money then becomes available to subscribe to a different type of ISA subject to the normal limits (e.g. no more than 4k into a LISA per tax year).

    This can all be confirmed with HMRC if anyone is in any doubt, or they can verify it for themselves in the below HMRC guidance:

    "Withdrawals of current year subscriptions, can effectively be replaced in any current year ISA, but cannot breach the 'one ISA of each type per tax year' rule.
    https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#subscriptions-that-do-not-count-towards-the-annual-subscription-limits
    • masonic
    • By masonic 6th Aug 18, 12:56 PM
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    masonic
    This leads to the stupid situation you've encountered. You can perfectly legally pay into a cash ISA for this year and LISA but you can't transfer from cash ISA to LISA (unless it's all of both accounts, cash and H2B)

    If you know about it though it's a non issue as there's nothing to stop you flexibly withdrawing from Nationwide to fill the Lisa.
    Originally posted by Gordon the Moron
    This is exactly what I've been trying to communicate, rather unsuccessfully it seems, in my last three posts.
    • Alexland
    • By Alexland 6th Aug 18, 2:16 PM
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    Alexland
    You can only pay into 1 cash LISA per tax year (I'm guessing you can split the 4k LISA allowance between cash and S&S though I've not tried)
    Originally posted by Gordon the Moron
    You are only allowed to contributie to one LISA type in any given tax year. As such the only way to hold both asset classes is withing a DIY S&S LISA but the interest rate for the cash balance will be negligable. See first page of https://www.gov.uk/individual-savings-accounts

    Alex
    • Reed_Richards
    • By Reed_Richards 7th Aug 18, 7:41 AM
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    Reed_Richards
    ....
    This can all be confirmed with HMRC if anyone is in any doubt, or they can verify it for themselves in the below HMRC guidance:

    "Withdrawals of current year subscriptions, can effectively be replaced in any current year ISA, but cannot breach the 'one ISA of each type per tax year' rule.
    https://www.gov.uk/guidance/manage-isa-subscriptions-for-your-investors#subscriptions-that-do-not-count-towards-the-annual-subscription-limits
    Originally posted by masonic
    Masonic did not mention that this single-sentence paragraph is in the Flexible ISAs section so applies only to withdrawals from Flexible ISAs, apparently. It's rather a throw-away line for such an important point. The use of the word "replaced" makes it slightly ambiguous but the "cannot breach..." clause certainly seems to indicate that you can withdraw money from a flexible ISA and re-invest it in a different type of ISA without that money counting twice against your ISA limit - just as masonic says. That's major concession compared to previous ISA rules.

    In the Martin Lewis article https://www.moneysavingexpert.com/savings/flexible-ISAs/ it says much the same:
    Remember, flexibility works on three types of ISAs: cash ISAs, innovative finance ISAs and cash held in a stocks and shares ISA. If you withdraw current year's cash from one type, you are allowed to replace it in another type, eg, withdraw from a cash ISA, replace in an innovative finance ISA.
    No mention of LISAs there but perhaps they weren't around with the article was written?
    Reed
    • masonic
    • By masonic 7th Aug 18, 7:56 AM
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    masonic
    Masonic did not mention that this single-sentence paragraph is in the Flexible ISAs section so applies only to withdrawals from Flexible ISAs, apparently. It's rather a throw-away line for such an important point. The use of the word "replaced" makes it slightly ambiguous but the "cannot breach..." clause certainly seems to indicate that you can withdraw money from a flexible ISA and re-invest it in a different type of ISA without that money counting twice against your ISA limit - just as masonic says. That's major concession compared to previous ISA rules.

    In the Martin Lewis article https://www.moneysavingexpert.com/savings/flexible-ISAs/ it says much the same:
    Originally posted by Reed_Richards
    If you'd been following the discussion, you'd see I'd pointed out that this was a feature of flexible ISAs in posts #7 and #9 (edit: and indeed in the first two paragraphs of post #12 to which you replied). And yes, the ISA flexibility rules were a major concession on previous rules.

    I give up.
    Last edited by masonic; 07-08-2018 at 8:08 AM.
    • Reed_Richards
    • By Reed_Richards 7th Aug 18, 2:54 PM
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    Reed_Richards
    Suppose I had paid 20k into a Cash ISA this tax year and then changed my mind and decided that I wanted to put half into a Stocks and Shares ISA instead. If the Cash ISA was flexible then it seems I could just withdraw the 10k and invest in the S&S ISA. If it was not flexible I would have to transfer the entire 20k into a flexible cash ISA. Then withdraw 10k for an S&S ISA then transfer the remaining 10k back to the inflexible cash ISA. That is so perverse and nonsensical I am having trouble getting my head around it. Sorry masonic.
    Reed
    • masonic
    • By masonic 7th Aug 18, 5:57 PM
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    masonic
    Suppose I had paid 20k into a Cash ISA this tax year and then changed my mind and decided that I wanted to put half into a Stocks and Shares ISA instead. If the Cash ISA was flexible then it seems I could just withdraw the 10k and invest in the S&S ISA. If it was not flexible I would have to transfer the entire 20k into a flexible cash ISA. Then withdraw 10k for an S&S ISA then transfer the remaining 10k back to the inflexible cash ISA. That is so perverse and nonsensical I am having trouble getting my head around it. Sorry masonic.
    Originally posted by Reed_Richards
    Your understanding is absolutely correct. I guess the original intention was to make all ISAs flexible, but I suppose there was lobbying by ISA providers to make it optional.

    The alternative would be to wait until after the end of the tax year when you could transfer half of it as previous year subscriptions. This wouldn't be an option if the destination account was a LISA though as all transfers from non-LISA accounts are subject to the annual 4k limit.
    • GeorgeEade
    • By GeorgeEade 11th Aug 18, 3:24 PM
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    GeorgeEade
    Thanks everyone for your help on this. @masonic I've spoken to Nationwide about flexibly withdrawing from them and depositing into Skipton, and it seems ISA flexibility does allow this.

    However, they are now saying that I can't invest with more than one provider in the same tax year. I'm not sure if this is correct, because last year I managed to contribute to my existing Nationwide ISA (which I have had for years), as well as open and deposit into a new Skipton LISA. Point #6 in MSE's article on Lifetime ISAs also says this is allowed. (Apparently as a new user I'm not allowed to post links.)

    Am I misunderstanding this "multiple providers in the same tax year" restriction? Is it actually something like you can't open two products with two different providers in the same year?

    I think I'm just going to take @masonic's advice and withdraw 4k from Nationwide and pay it into Skipton and see what happens.


    Edit: Just tried to move money from my Nationwide ISA to my Nationwide current account (so that I can make the payment from there to Skipton) using online banking, and it's giving this warning:
    As of the 6th April 2016: Any funds that are withdrawn from an ISA and paid into a non-ISA product may no longer be considered to be tax-free savings. You should not withdraw funds you wish to transfer to another ISA; instead, you'll need to contact the new provider who'll arrange the transfer for you.
    I'm guessing this warning is either outdated or not applicable to my situation?
    Last edited by GeorgeEade; 11-08-2018 at 3:44 PM.
    • masonic
    • By masonic 11th Aug 18, 3:45 PM
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    masonic
    Thanks everyone for your help on this. @masonic I've spoken to Nationwide about flexibly withdrawing from them and depositing into Skipton, and it seems ISA flexibility does allow this.

    However, they are now saying that I can't invest with more than one provider in the same tax year. I'm not sure if this is correct, because last year I managed to contribute to my existing Nationwide ISA (which I have had for years), as well as open and deposit into a new Skipton LISA. Point #6 in MSE's article on Lifetime ISAs also says this is allowed. (Apparently as a new user I'm not allowed to post links.)

    Am I misunderstanding this "multiple providers in the same tax year" restriction? Is it actually something like you can't open two products with two different providers in the same year?

    I think I'm just going to take @masonic's advice and withdraw 4k from Nationwide and pay it into Skipton and see what happens.


    Edit: Just tried to withdraw from Nationwide ISA to flex current account using online banking, and it's giving this warning:
    I'm guessing this warning is either outdated or not applicable to my situation?
    Originally posted by GeorgeEade
    You can safely ignore them saying you "can't invest with more than one provider in the same tax year" this is only true for ISAs of the same type. You can open up to 4 ISAs of different types (cash, S&S, IF, Lifetime), each with a different provider.

    As to the warning message, looks like that's outdated, although it is true if you don't pay it back into an ISA by the end of the same tax year.
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