ISA stupid question

[lionsleepstonight]

I've never been in this position before and I'm not too sure what I now do in April.

Due to an inheritance, I was able to open a cash ISA in March 24 and put the full £20k in it.

After April 6th I opened a s&s ISA as again put in the full £20k.

I can open another after April 6th, and plan to do so.

My Cash ISA had a fixed rate so will end and I've read I can transfer it to another provider with a better rate.

If I do that, would that class as my new ISA for FY26?

I'd rather open a new ISA as the money is currently in PBs and the performance since they changed the rates is dire.

No that won’t count as your isa for fy26, as long as you do it as a transfer rather than taking the money out and paying it in again. It should say on the website how to do a transfer.

If I do that, would that class as my new ISA for FY26?

No, it would be a previous year's allowance.

As PP says make sure you do it as a transfer so it doesn't count in the allowance. The new provider will organise it for you.

As long as you transfer it by using the formal method (complete a transfer form, send it to new provider, they will arrange for money to be moved from the current provider) then it doesn't count towards that year's ISA allowance.

What you don't do is withdraw the money from the ISA and open a new one - it would lose its ISA status and count as 'new' money from the year's allowance.

Thanks everyone!

As PP have said.

also you don’t need to open a new ISA every year. Of course you can if you wish but to be clear you can just top up an existing one(s)

Just out of interest, at the moment 1 year fixed ISAs are getting better interest than 2 years fixes. Also, you don’t have to open a new ISA each April - you can just add the 20K to the ISA you already have. My one ISA that I started in 2018 with 20K is now up to £50+k as I add to it each April and transfer the whole lot into one with a better rate when the fixed term ends.

An excellent cash ISA at the moment is Trading 212. Pays 4.9%, interest is paid daily and it is a flexible ISA.

Posted to soon! It is unlimited easy access as well, so great place for any savings.

Is there a reason you need to hold £60k in cash? If it's an inheritance and wasn't money you were banking on, and can put it away for many years or decades you'd almost certainly get a much better return in the long run in a stocks and shares ISA.

Also, how much more are you trying to put away in ISAs? Have you used your spouse's and children's ISA allowances (if applicable and something you would consider)? Have you put any in a SIPP? SIPP for any DCs?

I'm in the same position as you thanks to a generous inheritance which still has plenty more to come once property is sold, and these are all things I'm doing.

trading 212 is paying a good interest

I wouldn't transfer my money into that account though

Id put 2026 allowance of £20k ISA the account and look for another account to transfer your ISA that are doing poorly for interest

the reason being that the trading 212 account cash ISA is an enticement account and the interest may not stay as high - its already dipped last year from 5.1%

have a look at money box

not impressed with plum myself

Also you don't want all your eggs in one basket

This!

£20k is the most you can put in every year, not the most you can have in an isa full stop

I know you've split the first 2 into 1 cash, 1 s&s but if you want the rest to be cash just add it to the first one.

I.e. transfer your first one to the new provided then add the "new" £20k after april 6.
Less faffy than having 3 different accounts.

Thank you. Had not realised that. So I can top up an existing by £20k max.

I do have a cash and a s&s ISA.

Now I have clarity on the ISA position my next decision is ISA type.

I'm tempted with another S&S as the return is much higher than the cash one, but I appreciate it's a longer term product and I am 52 and will use this money to find my retirement eventually. Likely to start thinking of that by 60.

Because of that, I'm not sure if a SIPP is worth it with my timelines.

Would rather keep it in my name, so ISA for DH is out. DC has a very good CTF so hadn't thought for a SIPP for them, but will look into that actually.

Thank you all for all the suggestions and explanations.

Yes, or split the 20k across your existing isas. Eg add 10k to the cash one and 10k to the S&S one, or whatever split you want, as long as the total isn’t over the 20k limit for the year.

I'm tempted with another S&S as the return is much higher than the cash one, but I appreciate it's a longer term product and I am 52 and will use this money to find my retirement eventually. Likely to start thinking of that by 60.

If your s&s ISA is a sensible product with low charges (always check the charges!) eg a global index tracker, I'd probably drip feed the fy26 20k into that rather than one chunk.

The thing about a SIPP is that anything you can put in one, up to your entire earnings for the year, will attract tax relief so to put £10k in a SIPP you only need to put £8k of cash and the SIPP provider claims the other £2k direct from HMRC.

If you're a higher rate taxpayer the other 20% can be claimed back through your tax return.

Even if you aren't earning you can still pay up to £3,600 a year with tax relief - you put in £2880 and the SIPP provider claims £720 from HMRC. If it's money you don't need in the here and now it's a no-brainer to set up a SIPP for a DC.

But it is still the highest instant access, flexible account. The interest rate for new customers is now 5.05%.