Your ISA Questions Answered
Is there any limit on the total amount that I can save over the years with my ISAs?
No. You are obviously limited to your yearly allowance (a maximum of £3,600 in a cash ISA per year), but there is no limit on how many years of cash ISAs you may save. Since there is no limit, you should always have the interest from a cash ISA added to your ISA account to maximise your returns.
I have a stocks and shares ISA in my name. Can I transfer this to a relative?
No, ISAs are not transferable from one person to another. However, you can take the shares out of the ISA and then repurchase them in her name, or in her ISA.
When does interest get added to my cash ISA?
This depends on the provider, and the type of ISA. There are fixed rate and variable rate cash ISAs. Fixed rate ISAs usually pay on the annual anniversary of when the ISA was originally opened. Variable rate ISAs can be paid monthly or yearly; it all depends on your specific account. Have a look at any information you received when you opened the account, and if you're still unsure, contact the ISA provider.
What happens to a Fixed Rate ISA at the end of the fixed term?
This depends on the provider and their terms and conditions. Usually, Fixed Rate ISAs revert back to the provider's standard variable rate product. You can leave it as is, re-fix the ISA at whatever their current fixed rate offer is, or transfer it to another ISA provider (either variable or fixed rate). Usually (but not always) the standard variable rate is not very competitive, so it is beneficial to compare other available ISA rates to maximise your savings returns.
I had an ISA in Icesave. Have I lost the ISA status?
No. It has been confirmed that you will not lose your ISA allowance(s). When you receive your compensation cheque under the savings protection scheme, you will be able to reinvest this money in a new ISA. However, you cannot open the new ISA until you have received your compensation.
How do I transfer my ISA to a different ISA provider?
The rules are very strict on this. If you transfer an ISA, it must be done by the providers. If you withdraw money or transfer it yourself, you will lose the ISA status and hence the tax benefits. Once you have found a new account (compare ISA rates to get the best deal), check that you can transfer in (some accounts are for 'new' money only). Once you have made your decision and checked the rules, open the new account and let the provider know that you want to transfer an existing ISA in. They will ask you to fill out some forms, but it will all be handled by them. DO NOT take the money out of your original ISA, or transfer it yourself. If you do this, you will lose the ISA status (and the tax benefits!). The transfer of ISA funds must be done by the providers, and this will keep your ISA and its benefits intact.
Is there a limit on how many transfers I can do a year?
There is no limit on how many transfers you can do in a year. However, if you constantly move your ISA money around then you will most likely get a poor rate of interest over the year. You may find that some providers 'lock' your money in once it has been transferred, which may result in a penalty if you transfer inside a certain period. This is particularly common in Fixed Rate ISAs - transferring while the rate is still fixed will usually result in a loss of interest. Remember that transfers of ISAs can take some time, so try to avoid moving your ISA savings too much.
Can I transfer my cash ISA to a higher rate savings account?
Yes. However, you will lose the ISA status if you transfer an ISA to a non-ISA savings account. This means that you will have to pay tax on the interest. You will have lost the ISA wrapper forever, and will only be able to deposit the money back into an ISA using your future allowance (£3,600 per year for a cash ISA). Think very carefully before you transfer an ISA to a standard savings account, as it will usually cost you in the long run! Try comparing current cash ISA rates, and remember to take into account that you will pay no tax on the interest when comparing to non-ISA accounts.
I am moving to France, can I keep my ISAs (stocks & shares and cash), and still add to them each year?
The rules regarding this are the same for stocks & shares ISAs and cash ISAs, and do not differ according to the country you will be moving to. If you cease to be a UK resident, you can no longer add new money to your ISAs. However, you do retain the tax benefits of ISAs that are already open, so don't close them!
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