Banks 'ready for surge' as New ISAs come into effect
02 Jul 2014
The British Bankers' Association (BBA), which represents the major banks, said that its members are ready if there was a customer "surge" following the changes to ISAs.
As from yesterday (Tuesday 1 July) all tax-free ISAs have become New ISAs (NISAs), with the amount that can be saved or invested in them increased to £15,000.
Since 6 April, individuals have been able to put a maximum of £11,880 into the tax-free account during the tax year, of which only half could be in cash. The new rules mean that the allowance can be held in cash, or stocks and shares, or any combination of the two. In addition, any money that is held in stocks and shares ISAs opened during any tax year can be transferred into a cash NISA (although some providers might not allow partial transfers).
There have been concerns that banks and building societies may not be ready for the changes. However, a BBA spokesman said: 'The BBA has been holding weekly calls with our members, fund managers, and other providers to prepare for these changes. Staff have received specific training and banks have put plans in place to make sure they are ready if there is a surge of customers wanting to move from stocks and shares products into cash - or vice versa.'
The changes also mean that:
- ISA accounts open since the start of the tax year can be topped up to £15,000, but an additional one cannot be opened
- fixed-rate accounts can also be topped up, although different providers have different time periods when this is permitted
- transfers between cash and stocks and shares NISAs can be made as many times as an account holder wishes
- anyone aged between 16 and 18 can hold a cash NISA, but not a stocks and shares NISA
- Junior Isas limits have increased to £4,000 each tax year.
A Government factsheet on NISAs can be viewed here.