I have a couple questions regarding ISAs, mostly want to check I’ve understood the rules correctly.
I have a moneyfarm ISA which I opened a few years ago. It’s been growing and now costs me over £10 a month in fees
The plan was to open a freetrade ISA for this tax year and then transfer the moneyfarm ISA when transfers are available.
Now I’ve realised my direct debit has already contributed to the moneyfarm ISA this tax year so I believe I cannot open another S&S ISA this year but I will be able to transfer to Freetrade when transfers become available.
Is this correct so far?
Edit: Thanks for moving to the right place @Freetrade_Team1. Mobiles are hard
Yep I think so. As I understand it you can only contribute to 1 isa per year. You can transfer in between as many isas you hold multiple times.
I’m 99% sure you can open a second isa with freetrade but must NOT add additional money from your normal bank account.
I’ll await someone else’s remarks
Yeah I’m waiting for transfers too. I imagine it would take a while to set up and they are probably more keen to push growth for numbers and reduce losses before adding bells and whistles.
Alternatively, depending on your personal finance circumstances, assuming your portfolio value is circa £11k & not expected to exceed £20k before April 2020, you could temporarily use the Freetrade GIA for the rest of this tax year and then transfer over to a Freetrade ISA next April if you really want to avoid the Moneyfarm % fees.
Note, you’d have a dividend allowance of £2k and a CGT allowance of £12k to be mindful not to trigger outside of a tax wrapped account. But it would appear unlikely if you used the GIA temporarily in the interim subject to your own circumstances elsewhere.
If you really don’t want to pay them a tenner a month then look for a transfer offer from another Roboadvisor as you might be able to get a year free, or a discounted rate for a year, or cashback ( see Quidco / Topcashback ).
The other one to look at is Vanguard’s ISA, the fees are reasonable. Plus their Life Strategy funds do something similar to Roboadvisors.
Problem is there’s over 40K in the Moneyfarm ISA. I got a deal with them to manage the first 20K for free for 2 years plus a referral to a friend gives me another 5K free for 1 year.
These discounts are about to end though so I will be paying about £300 per year by the end of this year
If your goal is to invest via Freetrade, you won’t be able to this year. If you goal is to save on fees because your existing platform charges a percentage of your investment’s current value, then you can transfer to a fixed-fee platform and continue investing new money with your existing platform until next year.
In this scenario, Freetrade is not your best choice (not least because they don’t offer transfers in yet). Opening an ISA with iWeb costs £25, and after that there would be £0 fees every year to just hold your £40k investment.
You’re saying I can transfer my existing isa but also keep the current isa to pay into? I didn’t know that, thanks.
iWeb seems to charge £5 per trade which is fine as long as I avoid trading anything. Personally I’d rather have it all on one platform and not have to worry about multiple accounts with different restrictions. £36 seems very reasonable for that.
Surely I could transfer my isa to Freetrade (once transfers are available) and keep contributing to it in this tax year? Or can I only contribute to moneyfarm this year because I’ve already contributed to it even though I’ve transferred it to a different provider?
Edit: thanks for all the info by the way. It’s very helpful
Yes, depending on what the platform allows, but it is certainly possible with some platforms (eg. Vanguard) to transfer investments from one ISA to another but keep the source account intact and keep adding money to it.
My understanding is that even after a transfer to Freetrade, you would not able to contribute new money to the Freetrade ISA account.
@Sim when you say transfer I assume you mean money not stocks. Some ISAs will charge a royal fortune if you want to transfer like for like portfolio rather than selling up and transferring money.
Forgive me if you have answered this already but I have just closed an Investment ISA with Halifax this week. I have not added any money into it for years, maybe 10 years.
I am just waiting for it to arrive in my bank account and then I intend to add it to my Freetrade ISA.
Yes - you can add it in - but you only have £20k a year to put in an ISA. Withdrawing out in money into your bank and then paying into Freetrade will reduce your current year limit. To preserve the 20k limit you would need to transfer it in by getting them to talk to Freetrade via some forms. FT are working on that I think, but it is not available yet.
