ISA withdrawal qa1

#1
Hi



If I pull all funds from a cash ISA that has built up over many years and put 50K into premium bonds and regular savings accounts to maximise returns can I put that money back into any ISA at a later date?



Or do you have to start the ISA process again?



thanks

#3
If long term savings why not Premium Bonds? 50K safe with a chance of good interest returns with an average (median) payout of £500 a year and a 1 in 53000 chance of winning 1 Million with 50K holding.



I am trying to maximise returns on savings.



So there is no point pulling out of a cash ISA with regard to never being able to put any money back into it? If i put into none isa savings is the PSA likely to be removed? Why have an ISA anymore?






No you can't, and if this is, as it seems, long term savings, then the better option would be to shift to a S&S ISA.
Originally posted by Keep pedalling


#4



If long term savings why not Premium Bonds? 50K safe with a chance of good interest returns with an average (median) payout of £500 a year and a 1 in 53000 chance of winning 1 Million with 50K holding.
Originally posted by qa1


I haven't checked your maths but 1 in 53000 chance of winning the million each year does not sound like much. If you have average luck, you have to wait 50-60,000 years to be able to "expect" to get it. If you have worse than average luck you will have to wait longer, maybe 100,000 years.



How much longer are you planning to live? I suspect not as long as 50-100,000 years. So forget winning the top prize, it isn't going to happen.



So then you say why not premium bonds for long term savings. Well, it depends what you mean by long term but inflation is going to be running at 2% or more over the "long term" while premium bonds pay less on average do you are losing money in real terms. If you are looking long term you should really be looking at investment fund-based products like S&S ISAs



For the shorter term, PBs are probably fine, but you have said long term.




So there is no point pulling out of a cash ISA with regard to never being able to put any money back into it? If i put into none isa savings is the PSA likely to be removed? Why have an ISA anymore?


You can put up to £20k a year into ISAs so it will take a while to fill them if you empty them.



At the moment, the ISA products pay lower rate than non ISA products such as high interest current accounts and regular savers for small amounts and places like Atom Bank for larger amounts for a year plus. The different options in the market and their relative competitiveness will not necessarily stay the same in the long term which is why the time taken to stuff your money back into ISAs is a consideration.



There is no real reason for the PSA to get scrapped as now banks and individuals have got used to it no political party will bother scrapping it. However, while £500-1000 of PSA seems fine when the rates are 1%, it would not cover anywhere near as much of your income on the same capital if rates were 5%+ and the government are not going to constantly peg it to interest rates or necessarily grow it with inflation.

#7
I'm struggling to decide what to do now - i can get 1.1% if i transfer to another instant isa which will pay about £800 a Year



I dont like the sound of pulling it all out.



Anyone give any advice?








For the shorter term, PBs are probably fine, but you have said long term.



You can put up to £20k a year into ISAs so it will take a while to fill them if you empty them.



At the moment, the ISA products pay lower rate than non ISA products such as high interest current accounts and regular savers for small amounts and places like Atom Bank for larger amounts for a year plus. The different options in the market and their relative competitiveness will not necessarily stay the same in the long term which is why the time taken to stuff your money back into ISAs is a consideration.



There is no real reason for the PSA to get scrapped as now banks and individuals have got used to it no political party will bother scrapping it. However, while £500-1000 of PSA seems fine when the rates are 1%, it would not cover anywhere near as much of your income on the same capital if rates were 5%+ and the government are not going to constantly peg it to interest rates or necessarily grow it with inflation.
Originally posted by bowlhead99


#8



Tell that to the people who become millionaires every week
Originally posted by qa1


There are actually only 2 per month.



Had your £50k of cash ISAs been in a well ballanced fund wrapped in a S&Ss ISAs over the last 5 years, you would probably been sitting on a 6 figure sum now, and none of those gains are taxable.

#10



So there is no point pulling out of a cash ISA with regard to never being able to put any money back into it?
Originally posted by qa1


I'm not quite sure you understand how ISAs work? You have an annual allowance, £15k this year, £20k next. So there is not a situation of "never" being able to put money back if you take it out. Draw it out now and it will take 3 years to put £50k back in again (and with £10k still spare)

But as above for long term you need to look beyond cash and understand risk. You also need to realise that you don't need to put all the money in the same thing.

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