ISAs- a practical guide to what happens between now and the 1 July NISAs

savingsNew ISAs (or NISAs, as they are 'nicer' than the old ones) come into effect on 1 July 2014. The delay between last month’s announcement and introduction will allow providers to get their systems and processes in order before the new rules kick in, but where does that leave you if you have an ISA wedge burning a hole in your pocket, ready for 6 April when the new tax year starts?

So how much can I pay into my ISA on 6 April 2014?

On 6 April, the old rules will still apply. This means the maximum amount that can be contributed to a stocks and shares ISA is £11,880 and £5,940 into a cash ISA. However, on 1 July the limit will increase to £15,000 for both stock and cash ISAs, so you can then whack  in the extra £3,120/£9,060 on that date.

But I pay into my ISA monthly?

A few years ago the ISA limit was adjusted so it always fit roundly into a monthly figure, and from 6 April the monthly figure works out at £990. You could contribute £990 for three months and then pay £1,366 to reach the £15,000 contribution limit, or you could just start paying the new monthly figure of £1,250 from this month, as you would not exceed the old annual limit before the limit was increased in July.

Am I still limited to one provider?

You are still limited to one provider per tax year, for each of a cash and stocks ISA, but as before you can transfer previous ISA balances to another provider- something that has been particularly useful for cash ISA holders who found  themselves lumped with a rubbish rate of interest. Note that you can now transfer both current and old stock ISA balances into new cash NISAs- if you have found the stock market too volatile for your delicate risk/reward balance for example.

As always, remember that you must always complete the required ISA transfer forms when moving ISA cash- as otherwise it will count as a new contribution.

Anything else?

Many of the stocks and shares ISA supermarkets have announced new charges following the changes to platform charges and commission - even if your previous provider has been good value it may be worth looking at alternatives to make sure it is still the best one for your circumstances. There are some comparisons out there- like this one- and the best choice will depend on how much you have to invest, your choice of investment, how many trades you are likely to make and how much pretty apps mean to you.

What do you think?

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