ISA - is this normal?

[Harry Bloomfield]

I have a bit of cash put by in an ISA account, which is earning next to no interest. I have not added anything to the account for some years, it has just sat there.

A certain building society pays a good rate of interest on ISA accounts so I filled the online application form in, to open an account with them and to transfer the money in my existing ISA, to the building society. I have just got a letter from the BS saying they have brought out a condition where they will only accept input from accounts which has been put into an ISA this year - not any past amounts.

[Andy Burns]

Yes, that's normal ...

Mine has just cut it to a pittance over 1.0%

Some won't take tranfers in at all, but never seen one that only takes in current year transfers.

[WeeBob]

Yes this is normal.

Remember UK interest rates are 0.25% (iirc).

You can transfer the ISA to one of a number of "fund supermarkets" where you can choose "investments" for your savings.

In order to get a better return, your cash is placed at risk. i.e. values can go up and down.

Much, much, more online.

[Harry Bloomfield]

0.05% at present, which is why I am trying to move it.

I saw no mention of this condition when I tried to set it up..

It just asked for details of my originating bank, account and when did I want it moved - immediately, or wait until it had picked up any interest. Coventry BS..

[Theo]

It does say 'you can't transfer in previous years ISA savings':

Which is unusual. I suspect this is a 'no transfers in' account (ie there are people who could have a million in ISAs and they don't want a flood) but that they're announcing mid-year, and so they accept transfers of current-year's money because those people otherwise couldn't open an account.

Theo

[Andy Burns]

There was a change in the budget this year where you can put money into an ISA, take some/all out, and then put it back in again, which previously you couldn't do (not sure if it's only current year's money you can put back) maybe they have to allow that, even if they don't do transfers in?

[Andrew]

Why are you putting money into a cash ISA ?.

Open a share ISA and start researching global equity income and growth funds and investment trusts. The latter have a concept called the discount which can act in your favour when a trust is at a big discount for no real reason other than the 'teenage scribblers' don't like it.

Dabble in direct share holdings too if you understand the downsides (short term). You can find out what most of the investment trusts and funds actually invest in quite easily and just buy the shares directly.

[Andrew]

No one will have a million in a cash ISA - impossible. But there could be a few with maybe up to £50K by now (£3K per year plus interest).

More sense to open a share ISA and invest in a corporate bond fund. There has been a bloodbath in bond prices in the last 30 days (*) which is why UK 10 year gilts are now paying 50% more than in mid October, and also the reason why share prices peaked Mif October and have now dropped. This makes them better value, unless inflation takes off.

(*) People are getting spooked by the thought of US inflation.

[Andrew]

+1

even if you are in your 70's, you could still live another 20 years and history says the only way to protect against inflation is buy shares (or land and property).

[Andy Burns]

You can have £101,000 + interest in an ISA, maybe more if you transferred from a TESSA.

[Harry Bloomfield]

Theo submitted this idea :

Mmmm, I must have missed that :/ Thanks..

[Theo]

You might have made it in a shares ISA, but the current rules are you can transfer the whole lot to a cash ISA if you want.

ISA allowance is 15240 this year, 20K next year, BTW.

Theo

[Nightjar]

On 16-Nov-16 4:50 PM, Andrew wrote: ...

It hasn't been £3k for some years now. This year the tax free personal allowance is £15,240 and, should you wish to, all of that could go into a cash ISA. Nevertheless, even somebody who has invested their maximum personal allowance every year since ISAs were introduced would only have a bit over £80k + interest in ISAs

[dennis]

you get 1.5% in a Santander current account but there is a fee. If you have more than about £8k you will be better off than a 1% ISA from interest alone. You also get cash back for various payments.

[jrwalliker]

Something else to consider is lending through a peer-to-peer company such as Zopa. Zopa and some of the others are planning to offer ISA encapsulated lending soon. The holdup is getting the necessary regulatory approvals which is taking a very long time.

John