Regular amounts in ISA

[EachandEveryone]

I don’t know why I did it but I opened a stocks and shares ISA paying in a small about every month the plan was just to forget about it. I’m new to this and expecting my pension lump sum of £90,000 middle of April. I was just getting used to the site Vanguard.

my question is does that regular payment have an effect on the Stocks and Shares ISA I plan to put £20000 in at the end of April? Will it count as my allowance and should I close it?

Your question is rather confusing. I'm not clear what you plan to do, or what your concern is.

You have a stocks and shares ISA. You can put up to in £20k this financial year.

Next financial year you get a new allowance of to £20k. You can add that into the same S&S Isa, or into a new ISA (and keep the old ISA as dormant).

Under current rules you couldn't split it between the current and ISA and a new one, but I believe that changes in April and you will be able to pay into as many ISAs as you like - provided you stay within the £20k allowance in total.

Your pension makes no difference to your ISA allowance.

Having read it again, are you asking whether you can continue the regular payment and put in a £20k lump sum?

If so - no. You can put in £20k in total during the year. So if you put in a £20k lump sum you will have to cancel the monthly payments.

But you can keep whatever you paid in during previous years. You don't have to withdraw that before putting in the next year's allowance.

So i set up a regular payment isa stocks and shares. Not much money. My question is do i need to stop the direct debit before the end of the financial year? Thats when i will want to invest £20,000 into a new isa with a different company or, will the payments not have an impact on the new ISA?

Ok thanks so I cancel the monthly payments I shall ring them Monday. Its only a few quid so I can forget its there. I will be back with another thread asking where the best place is to put £80,000 when I see it in my bank account. Thanks.

The pp's have explained really clearly op, I'm not sure what more clarity you're looking for.

It's £20k total per year. So if you dump £20k in at the end of April you can't pay any more in at all in the same financial year.

So yes, if you have a regular payment going in - even if it's a tenner a month - you'll need to stop that as you'll have already used your entire £20k limit.

The regular payments count towards the £20k limit.

I would keep the regular payments and reduce the £20k paying in amount based on how much has already gone in and what will go in prior to 6th April.
Then on 6th April add more.

Why use another ISA. I would keep things simple and just have one.

This year (until 5th April) you cannot pay into more than one ISA of the same type. So you cannot have another Stocks & Shares ISA but could have a Cash ISA.
However you have to track how much of the £20k annual allowance you have used.

You could stop the regular payments and top up the S&S ISA to 20k before the end of tax year. Or you could stop the monthly payments and put the remainder of your allowance of 20K into a cash ISA before the end of the tax year. You then have a whole new £20k allowance for the next tax year. Don't withdraw the funds you have paid in to an ISA or you will lose the tax free status. If you no longer want the S&S ISA arrange to transfer the funds to a cash ISA, by opening a cash ISA and asking them to transfer it in.

I would definitely make sure you've used as much of the £20k allowance for this year as possible. You can replensh your ordinary savings from the lump sum in April.

Thanks it’s with HL which was my mistake as someone said they aren’t for small time investors the fees are too high. It’s ok I will just cancel the dd and put any spare cash in it and forget about it. In April I will put 20,000 in through Vanguard. It’s all new to me and I’m eager for my lump sum to be put in the best places.

@RootVegAndMash no need to be so short with me I was only clarifying the advice. This is all new to me I’ve never had any spare money before

If you’re not happy with HL fees you can transfer your existing ISA to Vanguard. No point paying fees you’re not happy with. This TRANSFER does not count as your allowance. Vanguard will do the transfer for you. Don’t withdraw it and to add it to vanguard; ask vanguard to transfer the HL isa. It’s a very simple process. If this occurs before 5th April you can add money up to your 20k annual allowance (if you’ve already contributed £1000 for example you can add another £19000). Then after 6th April you can add a further £20k. Hope this makes sense. If not please ask for clarification.

You can Transfer it now to Vanguard.

Switch funds within HL to a Vanguard fund which is exactly the same as available on the Vanguard Investor website, such as LifeStrategy 80% Accumulation.
Open an account with Vanguard and as part of the process Transfer In the HL S&S ISA, using In-Specie transfer (moving the fund). That way you remain invested whilst the move happens - it can take a few months.

Avoid having multiple ISAs as it gets hard to manage.