Cash ISA query

[EdGey]

I've had the same HSBC cash ISA for over two years now and have paid money into it pretty much every month since opening it.

I'm saving to buy a house so the new help to buy ISA seemed to me like a good option. 25% is a decent amount even if it does take a while to build up a worthwhile amount at a monthly £200 payment limit.

Today I rang HSBC and was told that because I have my current ISA, and have paid into it this month as I always have (£500), that I can not now open a help to buy ISA as my allowance has been used or apparently 'dedicated' to my current ISA for the entire year.

I find this difficult to believe/swallow - Is it correct?

I paid the money in literally this morning which seems to have ruined my chances. If I'm looking at this right it looks like I'll miss out on a possible £850 top up this year alone

 

[beh]

If you've only paid in £500 this tax year I believe you can partially transfer to a H2B ISA with Halifax (who also offer the joint best rate).

Transferring from another cash ISA – the transfer request must be made within 21 days of opening your Help to Buy: ISA, and can only be used to fund part or all of your initial deposit up to £1,000. Your current year’s subscriptions must be transferred in full as you are only allowed to fund one cash ISA per tax year. So to transfer current year funds into your new Help to Buy: ISA, you need to make sure that the balance of your current year funds are £1,000 or less. You could do this be transferring money above this amount to another, non cash ISA, account.

 

[Tosno]

On the bright side you can open a life time isa next year

 

[EdGey]

Oh that sounds promising - thanks, I'll give them a ring tomorrow morning.

Lifetime isa? don't be silly I don't need to worry about a pension in this day and age.

 

[weringo]

What you can do with HSBC is one thing, but you seem to have been given incomplete/incorrect information

http://www.santander.co.uk/uk/isas/help-to-buy-isa

Transferring in a cash ISA
If you have current year subscriptions totaling £1,200 or less in another cash ISA you will be able to transfer these funds into a Help to Buy: ISA in the same tax year, subject to the Help to Buy: ISA monthly limits. You will then be able to fund the Help to Buy: ISA in the current tax year but you will not be able to continue to fund the cash ISA which you transferred the funds from. To transfer from a cash ISA to your Help to Buy: ISA, please complete our transfer form

 

[EdGey]

Assuming I did make the transfer. I would be paying £200p/m and lose the ability to fund the ISA from which I made the transfer. So what happens to the rest of my allowance?

 

[beh]

If you have £500 to save each month, put the other £300 in a regular saver account instead. First direct offer 6% for 12 months - http://www1.firstdirect.com/1/2/savings/regular-savings-account

Cash ISAs are unfortunately fairly worthless now, the rates are so low and the yearly allowances are so high. Plus you now get £1000 (interest) personal savings allowance.

 

[TonyTurbo78]

What beh said, cash ISAs are pretty much worthless these days...what is it like less than 1.5% or whatever you can find now, absolutely rubbish.

Your better off buying into a mat ie silver or gold. I made so much money on gold from about 15 years ago, I believe silver will go the same way so I've invested in that now instead of the bank.

 

[muon]

What beh said, cash ISAs are pretty much worthless these days...what is it like less than 1.5% or whatever you can find now, absolutely rubbish.

Your better off buying into a mat ie silver or gold. I made so much money on gold from about 15 years ago, I believe silver will go the same way so I've invested in that now instead of the bank.

Yeh I think you've both missed the speculation boat for silver.

Spoiler

***Please user spoiler tags for images wider than 1280 pixels***

 

[TonyTurbo78]

and you think the market only goes up once?? It's a good time to buy.

 

[Buffman]

Oh that sounds promising - thanks, I'll give them a ring tomorrow morning.

Lifetime isa? don't be silly I don't need to worry about a pension in this day and age.

Lifetime ISA can be used to buy a house too (starts 2017 tax year and I think you need it in a whole year to get the 25% bonus however)

You now wont be able to use a help to buy ISA this tax year to full effect .

I started mine when they opened in december and now over 2k (although I had to remember not to use an ISA previous tax year.... not hard when ISA offerings are poor compared to the best current accounts.

 

[UTmaniac]

I believe you can upgrade a Help To Buy ISA into a Lifetime ISA, when the latter starts next year.

I believe that normally, you have to be under 40 to open a Lifetime ISA next year, but this "upgrade" route (which has a deposit larger limit per year, £2400 vs £4200 {with exception of initial £1000 HTB deposit}) is an exception that applies to others like me.

 

[s-p]

The Help To Buy ISA on a technical level is considered a Cash ISA. Therefore the following contribution limits apply:

You can only open one Cash ISA per year, but it is possible to transfer to another Cash ISA or Stocks and Shares ISA or Stocks and Shares ISA with another provider.

If you want to transfer to another Cash ISA/Help To Buy ISA, then the following applies:

You can transfer your current Cash ISA, as well as your ISAs from previous years. Cash ISAs from previous tax years can be split – with some money going to one provider and the rest to others. However, the full amount you’ve contributed during the current tax year must be transferred to the new provider

Given your comment...

Assuming I did make the transfer. I would be paying £200p/m and lose the ability to fund the ISA from which I made the transfer. So what happens to the rest of my allowance?

... this all depends on who you transfer to. As I stated above, the Help To Buy ISA is simply a Cash ISA. As a result, there are some providers who use legal loopholes to allow you to contribute to both a Cash ISA and Help to Buy ISA in the same tax year by using a wrapper around their products.

Customer can contribute up to the limit of £200 a month into the Nationwide Help to Buy ISA product and invest into another Nationwide cash ISA product in the same tax year.
This is because, currently unique amongst the major savings providers, Nationwide will enable both new and existing customers wanting to open a Help to Buy ISA with the Society to split their ISA savings across more than one cash ISA product, all within the Nationwide ISA wrapper.
Help to Buy ISA savers with Nationwide will therefore be able to benefit from spreading their ISA balance across more than one ISA product with the Society, saving up to the full annual tax year ISA limit of £15,240.

I believe Nationwide are the only large provider to allow you to do this, whilst other smaller firms like Aldermore support this approach as well.

Hope this helps.

 

[muon]

and you think the market only goes up once?? It's a good time to buy.

You think the market only goes down once? Flatlines once? Hoping for another bubble us possible the most absurd investment strategy I can think of.

I bet you got caught up in the silver hype earlier and bought closer to the top of the market. Especially if as you say you've been in gold for 15 years.

The idea that such a volatile market is suitable for for small investors is ridiculous. It'd be like trying to invest in oil and trying to tell where it would go next. Leave it to people that actually make the market.