Some basic ISA questions

[CoolHands]

I opened an ing ISA last year, in Sept. If I pay 150 a month into it by standing order, what do I do in april / new fincial year? Do I
A) carry on paying into it
B) 'freeze' that one with whatever is in it, and open a new one?
C) somehow transfer it into a new one?


Thanks

[Craikeybaby]

I'm not sure if the ING one is the same, but I have been paying into my Natwest one for years. It lets me pay in up to the set amount each year, irrespective of what I have withdrawn (ie it is limited by deposit, rather than balance).

[ellroy]

If its Equity based chances are the paperwork you signed allows the provider to open one each year until you ask them to stop.

As a result you carry on paying in with no change at all.

You will get paperwork saying you have £x in ISA tax year 12/13 and £x in 13/14 going forward on statements. Although it is effectively one lump of money as far as you see it.

I'd suspect cash ISAs will be the same, but have had very little to do with them over the years, mainly on the basis that the return on cash is garbage.

[CoolHands]

It was a cash ISA. Iirc

[Crafty_]

First thing to find out is what will be your new rate after April.

My one currently earns 3%. In April it goes to something silly like 0.2%, so I will need to either find another one and transfer the money in or ask the provider to give me a better rate on it.

You can put £5,760 a year (April - April) in to an ISA, so at £150 a month you're easily inside that.

imho don't freeze ISAs and start another, but keep putting money in to the one you have. Just make sure that its earning a decent rate.
If you find a product that is earning more interest than your own you can start a new ISA and transfer money in from an old ISA, as I understand it this does not affect the £5760 allowance. The caveat is that not all ISAs accept transfers.
There are various comparison sites you can look at to find good ISA deals. I'd want a month or so and see what they start offering for the new year from April.

[CoolHands]

thanks. It is 2.8% at the mo but as you say that will probably drop like a stone. In which case from what you say I will start a new one with another provider, and transfer this ing one into it? Then I 'close' the now empty ing one, right?

[Crafty_]

yeah, they will do all the transfer stuff for you when you open the new one I think.

It would be worth asking your current provider for a better rate to save the hassle of opening a new one. I did that last year, the girl tapped a few keys and that was it

[The Leaper]

Wife and I have made a number of cash ISA transfers. As April approaches you'll see many providers pushing their contracts so a good website gets you to comparion tables etc. Then once you have chosen where you wish your ISA to be transferred to, go and see them and set up a new ISA there for the new tax year, tell them you want to transfer other ISAs into it, and they will do the rest. There's a standard ISA transfer form that you will need to complete. Takes a few days for the funds to be transferred over.

DO NOT cash in the old ISA, receive the funds and then try and pay that into a new ISA elsewhere. All ISAs must stay withing their tax efficient wrapper and taking funds out in any way means those funds and the investment returns immediately lose their tax free status. You must transfer direct betweem one ISA and the other.

When choosing a new ISA I personally don't just consider the return on the funds. The credibility and reputation of the ISA provider is equally important. Always remember the golden rule: before giving an organisation your money always, always check to see how straightforward it is to get the money out of them. There are several organistions that have a bad reputation for the latter.

R.