FIXED RATE CASH ISA questions.

[Charlize43]

Excuse my ignorance but I can't find the answers to these question as I have been thinking about consolidating my savings into a cash ISA at 4% to protect it from Rachel Reeves (if that is even possible) as I approach retirement. These are hypothetical questions.

Cash ISA - currently you can invest £20K per financial year:

After 1 year, what happens to the money afterwards? Is it still tax free if I just leave it there?

If I take £20K and put it in a fixed rate cash ISA for 5 years, does that mean that I can't get another cash ISA for 5 years? Someone told me I can have more than one cash ISA, one every tax year, is that true?

With a matured ISA can I take the money and reinvest it back again in a fixed rate ISA but also add another £20K into the mix to grow the pot? Or does reinvesting it count as my tax free £20K for that year?

Thank you.

After 1 year, what happens to the money afterwards? Is it still tax free if I just leave it there? Yes, usually the default action by the provider will be to leave it in the ISA

If I take £20K and put it in a fixed rate cash ISA for 5 years, does that mean that I can't get another cash ISA for 5 years? No Someone told me I can have more than one cash ISA, one every tax year, is that true? Yes

With a matured ISA can I take the money and reinvest it back again in a fixed rate ISA but also add another £20K into the mix to grow the pot? Yes BUT you MUST not withdraw it, you must use the ISA transfer rules to reinvest and add another £20k. If you move money from ISA to ISA (receiving provider contacts old provider) you will retain the allowance of the prior year. If you withdraw it and start again you will lose the previous years allowance and only be using the allowance in the current year.

You can open as many ISAs each year as you like.

You can only put £20k per year into your ISA(s)

Once the money goes into an ISA it remains tax free for ever

If you want to move money from one ISA to another (eg your 5 year 4% fix has ended and it's now it's only giving 0.5%, so you want to put that money in a new 4% fix) you need to get the new ISA company to move the money for you. You should NOT withdraw the money yourself because it looses it tax free status when it's out of it ISA wrappera

The year that you move the money from your old ISA to your new ISA (as described in the previous paragraph) you can put another 20k in your ISA(s) just like every other year