ISA maturing, what should i do

A question about : ISA maturing, what should i do

My husband and I have a Direct Isa with Santander each worth Ј14k. We have not used any of last years allowance and are not likely to in the future. It is a pot to use as top up if we need anything over and above normal living costs funded by pensions.

These are about to mature in the next couple of months and we usually do research and transfer to a better rated ISA. But this year our circumstances have changed. My husband has a terminal illness and he wants to cash in his ISA and put it into our Lloyds joint current account so that I have easy access to monies if anything happens to him. In theory good idea but it would not earn any interest.

Was thinking maybe change banks and put it into a Santandar 123 account as I believe they would pay interest up to Ј20k. We would want it to be a joint account so would they pay savings interest to a higher amount?

I would like some advise as to what is the best solution for me regarding above and what is the best thing for me to do with my pot going forward.

Best answers:

• The Santander 123 pays 3% gross on 3-20k so that is better than most isas even allowing for tax if you are a basic rate taxpayer. Some of the other current accounts pay more - check best buys but none of them will let you put in up to Ј20k although most banks will let you open more than one account but it may involve a bit of shuffling money and direct debits around which some people don't mind doing. In the interests of simplicity we keep our instant access savings in 2 Santander 123 accounts (I sole in my name and 1 joint with my husband.) but in your case you would be best putting the Ј14k in one joint account. You will need to have at least Ј500 paid in each month and 2 direct debits and there is a Ј2 per month charge but you get cashback on council tax and utilities. My cashback on average each month is around Ј6-Ј7 so it more than covers 2 lots of bank fees.
• Thankyou for the advise. I think I might switch our joint account from Lloyds to Santander and put my husbands Santander isa pot Ј14K in there to earn interest and have easy access. I believe that you can't transfer my is from another Santander account so should I put the money is in my lloyds account before switching banks?
• My sympathies for the position in which you and your husband find yourselves.
  I can understand the desire to have the money in a joint account and to get your affairs in order but did you realise that in the last Autumn Budget George Osborne introduced a new tax concession which allows bereaved spouses to inherit their partner's tax free ISA status? This will be done, I believe, by allowing them a one off extra tax free ISA allowance for a year after bereavement equivalent to the amount held in the ISA.
  So if your husband cashes in his ISA now, that tax free allowance will be lost to you going forward. You may decide that the extra tax free interest earned on Ј14K for several years into the future may not be worth bothering about compared to having the money in a joint account, but at least be aware of that option.
• Can't you just move the money into your ISA?
• To meet account conditions they have to be funded monthly.
  5k in club Lloyd's
  Balance in Santander 123.
  Monthly standing order between accounts (Ј750).
  The monthly Lloyd's account is a good addition.
• Ј1500 monthly inflow required for Club Lloyds. Still just an SO each way.