advertisement


ISA Question...

I am not sure there is a problem.

If you open a new fixed term ISA now, with the minimum amount allowed, you have 30 days to transfer existing ISA. If the one you have reaches term on 24 April, transfer it then.
 
Bart said:
the application asks you to declare if you have contributed to an ISA in the current tax year i.e. the one about to finish - mine did anyway, and told me I needed to fund it before the end of that 'old' tax year so that's a catch I think.
Click to expand...
Yep! That sounds about right. Rates for ISAs tend to rise a little before the end of the tax year to entice those who're not fully funded. However, things are a bit different at the mo' inasmuch as fixed rates dropped 6 0r 7 weeks ago to almost equal easy access rates. Pretty obvious reasons, of course; then can reduce easy acc's but no fixed, and it's London to a brick on that rates are going to fall this year..

Anyway, the new tax year has started and much as I'm not keen to tie up my ISAs by transferring my e/acc'e , I'll be fully funding in fixed for the both of us (unless they pull the plug on decent fixed rates), which is a lot of savings tax I won't have to pay. I'm mildly surprised that the ISA allocation hasn't risen but more surprised in view of the state of the gov's finances, that premium bond max. holdings haven't moved for years.
 
Is £20k the maximum limit for an ISA now then?

I know that Halifax (used to) have an account which gives a smidge over 4% for one year, as long as you don't make any more than 3 withdrawls in total, it also pays that on the total balance of the account up to some figure I don't remember but it's definitely more than 100k.

One thing that shocked me when I was looking to move some of my savings in to a different banking group last year was just how low the balance that you can get the "max" interest rates on any savings acounts are. They all advertise figures of 3, 4, 5, 6% PA etc but when you read the details it's often only for the first 5 or 10 or 15k and then above that they pay fractions of a % on the rest of the balance.
 
And you pay tax on interest earned over £1000 on that Halifax account.
At 4% interest you only need £25K invested and you are taxed over that.
 
gez said:
Is £20k the maximum limit for an ISA now then?

I know that Halifax (used to) have an account which gives a smidge over 4% for one year, as long as you don't make any more than 3 withdrawls in total, it also pays that on the total balance of the account up to some figure I don't remember but it's definitely more than 100k.

One thing that shocked me when I was looking to move some of my savings in to a different banking group last year was just how low the balance that you can get the "max" interest rates on any savings acounts are. They all advertise figures of 3, 4, 5, 6% PA etc but when you read the details it's often only for the first 5 or 10 or 15k and then above that they pay fractions of a % on the rest of the balance.
Click to expand...
An ISA is limited to a maximum of £20k in each tax year; transfers in from existing ISAs are allowed.

Savings accounts have no limit but any interest over £1000 is taxable.
 
  • Like
Reactions: gez
Cav said:
I am not sure there is a problem.

If you open a new fixed term ISA now, with the minimum amount allowed, you have 30 days to transfer existing ISA. If the one you have reaches term on 24 April, transfer it then.
Click to expand...
Yes, the transfer bits fine.

It's whether I'm blocked from opening another separate ISA to actually pay into for 2024/25 is where the issue is.
 
gary1064 said:
You can open an ISA purely as a vehicle to transfer in previous years ISA money. As long as you don’t fund this ISA with any new money you can open a separate new ISA for this years allowance.
Click to expand...
Yes, that's the answer I was hoping for :)
 
gez said:
One thing that shocked me when I was looking to move some of my savings in to a different banking group last year was just how low the balance that you can get the "max" interest rates on any savings accounts are. They all advertise figures of 3, 4, 5, 6% PA etc but when you read the details it's often only for the first 5 or 10 or 15k and then above that they pay fractions of a % on the rest of the balance.
Click to expand...
Some banks may have tiered rates, but few if any building societies do. Tiering to REDUCE the interest is sth I've never heard of outside some bank accounts. Rates are quoted usually for annual interest. Monthly interest, if offered, is a bit below this, although the AER is the same.
Bob McC said:
At 4% interest you only need £25K invested and you are taxed over that.
Click to expand...
Assuming you're over the £12570 allowance? I believe that for a non or lower earner this doesn't apply until or unless you have interest amounting to more than the allowance, of course (Cash asset rich and income poor?????)
Cav said:
transfers in from existing ISAs are allowed.
Click to expand...
Unlimited, I think, up to a (sensible) point.
Cav said:
Savings accounts have no limit
Click to expand...
No (unless stated; usually a million !!!) but remember that anything over $85K per person in any one institution ( which may include two or more retail outlets) is not covered by the FSA in case of a major default like the Islandic banks fiasco a few years ago.
gary1064 said:
You can open an ISA purely as a vehicle to transfer in previous years ISA money. As long as you don’t fund this ISA with any new money
Click to expand...
You can add new funds to an existing acc't set up to transfer old ISA money; you don't need two separate accounts unless the first was a fixed one and over the time limit.
 
It used to be a rule that you could only pay into one ISA of a particular type within the same tax-year (e.g. still within the £20k limit you could pay some into a cash ISA and some into a stocks & shares ISA, but not into two stocks & shares ISAs). That was arbitrary & silly I thought, but that rule has now changed for this tax year. See section 1.2 of this:

www.gov.uk

Tax-free savings newsletter 11

www.gov.uk www.gov.uk
 
andyoz said:
HMRC seem adamant that you cannot open 2x ISAs of the same type in a tax year.
Click to expand...
Yes that IS confusing; more so as he opened (but maybe not funded?) two ISAs in 22/23 (last one 5th April; tax year starts 6th April) Many changes are not in progress as linked by Gustav above, but most of these relate to the retail manager, not the subscriber.

Until recently, and possibly still effective, you could only open one cash ISA (or S&S ISA) per tax year for investing current funds. You can open, transfer previous ISAs and/or current funds up to time limits set by the account provider, though you may have yo select just one or the other on the on-line form initially. If you've opened that ISA purely for transferred funds, there's nothing stopping you from opening another for current funds.

This is how I've operated for decades and understood the situation.
 
Well that's typical, I finally go in to setup the 1 year fixed Virgin ISA and they have pulled the product overnight...only the Easy Access option now.

I was delaying it to give me the biggest window to get my old account switched over once that Matures on 24 April. You have to send hard copy forms in and last time I did it it took weeks to actually show and wanted to make sure I would hit the 30 day deadline from ISA setup...
 
Get another one from another provider.
Quickly.
All 5% deals have gone.
The best 1 year fix last night was Cynergy bank at 4.8%*
 
Bob McC said:
Get another one from another provider.
Quickly.
All 5% deals have gone.
The best 1 year fix last night was Cynergy bank at 4.8%*
Click to expand...
Yes, I suspected this would happen.
I liked Virgin as they only stung you 60 days loss of interest if closing early (which is possible this year in my case).
Others are 90 to 180 days...

Think I'll just sign up to their easy access and roll with the Interest rate punches.
 
You must log in or register to reply here.


advertisement


Back
Top