molko

Who knows about ISA's ?
I have MAXI ISA, i've had it about 5 years, i pay £150 into it every month. Can i now open a mini ISA next week and pay a small amount into it ? or am i only allowed 1 ISA?

Thanks

TopBanana

This information isn't hard to find, especially at this time of year. If you can't be bothered to research it yourself, I suggest you find a good IFA to help you

scott8629

Are you in a mood ?

Petem95

You can pay upto £3k cash into a mini cash ISA, or upto £7k into a shares ISA (which it sounds like you've been paying into)

Anyone who doesnt have at least a mini cash ISA is pretty stupid as Im sure anyone can save £3k/year - and you may as well put it in an account where you dont pay tax on the interest.

molko

Correct i have a shares ISA which i opened years ago, and i guess is been rolling over, over the last few years, i dont really know where i stand with opening ANOTHER ISA, this time a mini cash. I am still paying into my shares ISA, i think i can have another as the new one is opened in a new tax year

Petem95

You can open as many ISA's as you want, but can only invest £3k cash AND £7k shares each tax year. But remember if you put £3k in, then take £1k out - you cant put that £1k back in during that tax year.

All my cash ISA funds are currently in an A&L ISA which is paying 5.2% AER.

Everyone with ANY savings should fill use their cash ISA's.

molko

Cheers mate, thanks very much. I'm going with Fidelity International

Thanks

James Neill

iTrader: (1)

That sounds well wrong. See here

http://money.guardian.co.uk/investme...603150,00.html

little-ginge

You can only have 1 ISA in any tax year. You can invest up to £7,000 in a MAXI ISA or £7,000 into a MINI ISA*. You can't invest into both a Mini & a Maxi, in the same tax year.

If you have been paying by DD for this tax year (2005-06) into an Maxi ISA, and wish to continue with this arrangement for the new tax year, you cannot invest into a Mini ISA; however, you can stop the payments as at the end of this tax year and then start a new Mini ISA, as of the 6th April. Your investments which you have made into the Maxi will continue to go up or down dependent on the markets, and will run in conjunction with the Mini ISA.

*With a Mini ISA you can take the two components to total £7,000 so effectively having 2 MINI ISA's(£4k stocks and shares/£3k in a cash mini ISA) out with seperate providers, but if you have a Maxi you can only invest with one company.

Mr Taxman obviously takes a dim view of people who open 'dual plans'. If this is the case you will need to inform your ISA provider(s), and it normally means that you will lose the tax free status on the money you have already saved in the second ISA..

HTH.

Petem95

Sorry I got it a bit wrong there, been a while since I read up on the exact criteria - and I only ever invest £3k cash per year in mine anyway!

Theyre well worth using anyway - also theyre unlikely to be around forever. Im not sure what will happen when they do stop them - maybe they'll let you continue to receive tax-free interest on whats in there, or maybe not.

little-ginge

If, and when, they do stop, the situation will probably be as it was with TESSA's (Tax Exempt Special Savings Accounts) when ISA's were introduced in 1999.
As TESSA's no longer existed, any TESSA's which matured after 5th April 1999, could be invested into a TESSA-only ISA so that investors could still receive the tax free interest.

HTH.

Hol

iTrader: (1)

I used to run the back office for a UT, PEP and ISA Company.

Basically, you can have either a Maxi or Various parts of a Mini ISA in any year. Every new TAX year you are entitled to take out another years allowance.

So technically, your old ISA has just rolled onto the next year at £1800 Per Year.

These days the ISA is not as tax efficient as it used to be, as a lot of the income tax benefits have been cut.
As stated above a good independent financial adviser will be your best bet.

Sub97

Are you better off putting money into an ISA then, than paying extra off your mortgage?

Sorry if this is a stupid question! But I'm over paying my mortgage by 500-700 pounds a month, would I be better off putting that into an ISA?

Tiggs

depends on what net growth you think you'll get...whats your mortgage? 4-5%? think your isa will beat that?

over the long term it prob will, all my equity savings are in excess of my mortgage despite the recent dip....just be aware of the risk that it wont.

or go talk to a bank (or a VERY cheap/generous IFA)

James Neill

iTrader: (1)

It's hard to decide without figures. But by paying off more of your mortgage you're reduding the principle and therefore the amount of interest you're charged over the full term.

If you can do a calculation of total amount payable with and without the extra £500-£700 extra you're paying per month. The difference is the interest you're avoiding.

Next, do a calculation of what £700 per month in an ISA would be worth (over the same period - ie, the shorter mortgage period). If this is more then the answer is Yes.

The difficulty is the number of variable over such a long time - eg, length of mortages, stock market performance, mortgage rates.

My preference would be to do £400 extra on mortgage repayments and then £200 in an ISA each month (for a rainy day/retirement). That is, spread things around a bit. Morgage rates are low at the moment so an ISA investment will probably perform better. But you're also paying off the morgage quicker - as rates are bound to go up again in the future and having less to pay off means it won't hurt so much.

Sub97

Thanks guys.

My mortgage is 4.59 for the next two years.

I think I'll stuck to paying that off for now.

TopBanana

Wouldn't it make more sense to switch your ISA investments over to the mortgage at that point?

Molds

Why don't you go and sit down with an IFA and discuss it?

TopBanana

Talking to me? Your post doesn't seem to make sense

Funkii Munkii

I sort of started a question in a pension thread a couple of weeks ago, I was going to suspend it for 12 months to fund another interest and was debating whether to opt back in or not, anyway......
I am very happy with how my ISA has progressed and had considered putting the pension money in the ISA instead, I have no idea of the figures involved on what it may earn in a pension fund against an ISA but would it be a better financial proposition ??

Molds

Sorry TopBanana I wasn't talking to you, that was aimed at molko.

TopBanana

That's OK, was a bit confused!