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Ask Rachel
Working in the financial industry for over 30 years, Rachel Thrussell is the leading independent expert on UK savings products. Her views are constantly in demand from both the industry and the press.
Can you split the allowed ISA allowance over a number of providers or do you have to put your money into the same ISA/provider? I have started a regular ISA saver, but I’m not sure on the rules for opening another account.
You can only put new money into one current tax year cash ISA at any time, meaning you cannot open another cash ISA with a separate provider, unless you decide to transfer your existing regular savings ISA to this new provider. You can have old cash ISAs from previous tax years with different providers, and you are also allowed to open separately with different providers a stocks and shares ISA, a Lifetime ISA and/or an Innovative Finance ISA, provided you don't exceed the total ISA allowance for the tax year of £20,000. It is worth noting that some providers do allow different versions of their cash ISA to effectively count as one, meaning you could hold a fixed, easy access and/or regular saver ISA with them at the same time. Check with your regular saver ISA provider to see if this is something they offer.
This week's
average rates
| No Notice | 0.32% |
| Notice | 0.80% |
| Cash ISA | 0.75% |
| 1 Year Fixed Rate Bond | 0.96% |
| 2 Year Fixed Rate Bond | 0.99% |
| 3 Year Fixed Rate Bond | 1.14% |
| 4 Year Fixed Rate Bond | 1.29% |
| 5 Year Fixed Rate Bond | 1.34% |
| 19 May 2020 | |
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Alternative sources of income
Pension savers could consider diversifying their savings
Consumers concerned about the volatility of the stock market in the wake of the Coronavirus pandemic and the impact it could have on their pensions, should consider alternative ways to save alongside a traditional pension pot.
“At this moment in time, consumers could well be worried about their financial health or indeed how stock market volatility could wreak havoc on their pension fund, where its value can go up as well as down,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “If they have some disposable income gained from the lockdown, then they might be looking at more ways to build provisions for the future.”
One way savers under the age of 40 can consider diversifying their pension savings is by opening a Lifetime ISA (LISA). As Springall explained: “Savers can put in £4,000 each year until they turn 50 and the Government will add a 25% bonus, up to a maximum of £1,000 per year. A LISA is available to savers aged between 18 and 39. The downside to a LISA is that there is a penalty to pay for access to the funds for any reason other than to purchase a first home or retirement, however the access penalty of 25% has been brought down to 20% in response to the Coronavirus pandemic. Accessing funds from a LISA should be a last resort though, plus while HMRC has backdated the reduced charge to 6 March, savers may need to wait until June to get their money back as providers adjust to the change. The best cash LISA rate today is 1.25% gross, on offer from both Moneybox and Nottingham Building Society.”
Alternatively, homeowners nearing retirement and who are looking to boost their pension pot could consider equity release. Springall explained: “These should be investigated carefully as while they can indeed provide funds to borrowers, unlocking wealth from the home also has consequences on inheritance planning. These can provide some flexibility though – in fact, borrowers could choose a drawdown option to take what they need at different times and this can minimise interest charges unlike where a lump sum was taken on outset. It is important to point out that the best option for consumers will depend on the amount they can borrow, a plan’s flexibility, an applicant’s age, fees and not just on the interest charged. Therefore, seeking independent financial advice is a must.”
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