NISA FAQs – what you need to know - ISAs - News - Moneyfacts


NISA FAQs – what you need to know

NISA FAQs – what you need to know

Category: ISAs

Updated: 25/06/2014
First Published: 25/06/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

It's official – in less than a week's time the NISA will be with us. It's been a talking point since April, speculation is running wild about whether the new rules will boost rates, and people everywhere are wondering what it'll actually mean for them.

So, we've answered some of the most pressing questions to help you make sense of things.

  • I'm a bit confused by this NISA talk. What do the changes actually mean?

    The biggest change is the amount you'll be able to save tax-free. As of 1 July the limit will rise to £15,000, and there'll be no lower limit for cash savings either. You'll be able to save the entire amount in a cash NISA or into a stocks and shares version, or can split the amount between the two in any way you wish.

  • Will I need to open a NISA next week?

    No – if you've already got an ISA the changes will all be made behind the scenes. You don't need to do a thing, nor do you need to open a new account to take advantage of the new rules, and some providers won't even change the name – the only difference you'll notice is the ability to stash more money away.

  • I opened an ISA in April, but I've since found better rates. Can I put the rest of my £15,000 allowance in a different account?

  • No - The rules around the number of ISAs you're allowed hasn't changed – you're still only allowed one ISA of either version in a tax year, so if you've already got a cash ISA you won't be able to open another one next week. You can, however, transfer your pot into a new ISA, but just make sure you follow the correct transfer process.

  • I've always saved in a stocks and shares ISA, but want to transfer some of my investments into cash. Can I do this?

  • Yes - Under the old system you wouldn't have been able to do so but the rules regarding moving funds between cash and investments have been relaxed, so now there's nothing to stop you from transferring your stocks and shares savings into a cash ISA (or vice versa) should you wish.

  • I've already got a cash ISA for this year, but I want to put some of my extra allowance into stocks and shares. Will I be able to open another ISA?

  • As long as it's a stocks and shares ISA, then yes, as you can still have one of each.

  • Can I move the money I've already saved into a different account without losing my tax efficiency?

  • Yes, but only if you follow a particular process. You can't simply close your current ISA, withdraw the money and deposit it into a new account next week, as technically that would mean you had two active ISAs in the year. What you need to do instead is follow the transfer process – find an account that accepts transfers in and they'll arrange the transfer for you, ensuring you can retain your tax-efficiency and can continue saving for the rest of the year. A word of warning, however – not all accounts accept transfers in, and if you've already got a fixed account you could be penalised for transferring out early, so make sure to check.

  • I want to try my hand at stock market investing, but I'm concerned about the lack of security. Can I put my savings back into cash if I change my mind?

  • Yes, as long as you're prepared for the fact that you may have less than you initially invested if your funds don't perform well. Stocks and shares ISAs are still a lot riskier than their cash-based counterparts and are generally considered longer-term investments, but now you'll have the option to move your savings back into cash should you wish.

  • I took out a fixed rate ISA in April. Will I be able to top up to the new £15,000 limit next week?

  • Perhaps. It all depends on the terms and conditions of your particular account, and bear in mind that some only have a limited window for you to make those additional deposits, so make sure to check the small print.

  • I won't be able to top up to the full £15,000 this year. Will I be able to rollover my allowance?

  • No – as under previous rules, if you don't use it you lose it! You can't rollover any unused allowance to the next tax year, so it's always worth saving as much as you can to maximise your tax-efficiency.

What Next?

Find a home for your 2014-15 cash ISA allowance

Use our savings search for a more detailed look at your NISA options

Find out everything you need to know about saving or investing into an ISA by downloading our FREE guide

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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