STAKEHOLDER SAVING
Savings Account and Mini Cash ISA
Frequently asked questions
- What’s the difference between a Stakeholder Saving Mini Cash ISA and the other Mini Cash ISAs on the market?
- What if I already have a Mini Cash ISA and want to open a Stakeholder Saving Cash savings account?
- How old do I have to be to invest in a Stakeholder Saving Mini Cash ISA?
- How much can I save in a Mini ISA?
- How much tax can I save?
- Can anyone pay into an ISA?
- Can my partner and I have a joint Mini ISA?
- Can I open a Mini ISA at any time in the tax year?
- How do I know which Mini ISA is a Stakeholder Saving approved product?
- If I have put the maximum amount into my Mini ISA this year can I add more the following year?
- What should I look for when choosing a provider?
- How quickly can I get at my savings if I need cash, say in an emergency?
- What if I take my money out? Do I lose out?
- What if I want to change my Mini ISA?
- What’s the difference between a Stakeholder Saving Mini Cash ISA and the other Mini Cash ISAs on the market?
What’s the difference between a Stakeholder Saving Mini Cash ISA and the other Mini Cash ISAs on the market?
In a Stakeholder Saving mini-cash ISA the interest rate can’t be less than 1% below Bank of England base rates the Bank or Building Society must accept a minimum payment of £10 into the account (although they can accept less if they want) you can withdraw your money as often as you like (although the Bank or Building Society might ask for 7 days notice).
What if I already have a Mini Cash ISA and want to open a Stakeholder Saving Cash savings account?
If you already have a Mini Cash ISA, then ask about a Stakeholder Saving savings account. The benefits are similar to the Stakeholder Saving Mini Cash ISA, but you will pay tax on interest earned in the account. Banks and building societies deduct tax from your interest automatically, but if you are a higher rate taxpayer you will have more tax to pay.
If you are not a taxpayer you can register for your interest to be paid without tax being deducted. Ask for Form R85 at your bank or building society or you can ring the Registration Helpline: 0845 980 0645.
Find out more at www.hmrc.gov.uk/taxback ››
If you pay the 10% starting rate of tax you can claim back some of the tax you have paid on your interest. Ask for Form R40 from the Taxback Helpline: 0845 077 6543.
Find out more at www.hmrc.gov.uk/taxback ››
For more information speak to your bank or building society. Or find an Independent Financial Adviser at www.ifap.org.uk ››
How old do I have to be to invest in a Stakeholder Saving Mini Cash ISA?
Anyone resident in the UK over the age of 16 can save in the cash component of an ISA, including a Stakeholder Saving Mini ISA.
How much can I save in a Mini ISA?
Each year you can open one Mini Cash ISA and one Stocks and Shares Mini ISA.
The most you can save in an ISA in any tax year is £7,000. The Government has said that this limit will stay at £7,000 until April 2010.
You can put your money into just one type of Mini ISA, or both, up to these limits:
| Type of Mini ISA | Savings Limit (2005–2010) |
|---|---|
| Cash | up to £3,000 |
| Stocks & Shares | up to £4,000 |
How much tax can I save?
If you pay tax at the basic rate, you would usually pay 20 per cent tax (2005–2006) on the income you get from your savings. If you pay tax at the higher rate, you would usually pay tax at 40 per cent. However, if you pay the 'starting rate' of tax — that is 10 per cent - you would only pay 10 per cent on interest income. With a Mini Cash ISA you pay no tax on any income you receive provided you do not exceed the savings limits set for each type of ISA.
Can anyone pay into an ISA?
To pay into an ISA you must be:
- Resident in the UK — with two exceptions: Crown employees, such as diplomats or members of the armed forces, who are working overseas but paid by the Government; and their husbands or wives who can pay into an ISA whilst they are living abroad for work purposes.
- Over 16 for the cash component.
- Over 18 for stocks and shares.
Can my partner and I have a joint Mini ISA?
No. An ISA must be in one name only.
Can I open a Mini ISA at any time in the tax year?
Yes, in each tax year (from 6th April to 5th April of the following year), you can put money into either:
- One maxi ISA,
- Or one or both mini ISAs
but if you already have a Mini ISA of any type for that year you cannot open a Maxi ISA.
How do I know which Mini ISA is a Stakeholder Saving approved product?
Just ask your bank, building society or fund manager or get a list of approved providers ››
You can also find an Independent Financial Adviser local to you, at www.ifap.org.uk ››
Remember, whenever you’re choosing a savings plan, no matter which provider it’s with, ask for one that meets the Stakeholder Saving criteria.
If I have put the maximum amount into my Mini ISA this year can I add more the following year?
The annual savings limit for any type of ISA runs from 6th April to 5th April of the following year, this is known as the tax year. It does not run from the date you open your account. Even if you open your account later in the year you can still put the maximum in, up to the savings limit for your ISA by 5th April. If you have reached the savings limit for a particular tax year you can only add more once the next tax year begins.
How quickly can I get at my savings if I need cash, say in an emergency?
It depends on the type of savings or investment account you hold in your ISA, some allow access immediately, while others may require a short period before they can release the cash or impose a charge for early withdrawal. You should check this with your provider.
If you have a Stakeholder Saving Mini Cash ISA then you are entitled to get your cash within 7 days of asking for it at no charge. You’ll need to go into your branch, present some ID and sign your name on a form to kick-start the process.
What if I take my money out? Do I lose out?
You can take your money out whenever you like and you don’t lose any tax relief already received on those savings.
However, if you want to take money out of your ISA you may not be able to put it all back into your ISA in the same tax year, so you may be prevented from getting further tax relief on that amount until the next tax year.
This is because you can only put in money up to the savings limit for that type of ISA in any tax year, for example £3,000 for a Mini Cash ISA, whether the amount paid in is new saving or replacing amounts withdrawn earlier. The tax year runs from 6th April to 5th April of the following year.
For example, if you have put in the maximum allowed in that year and then take some out, you will not be able to put any back into your ISA until the next tax year, when it will be counted towards the maximum savings limit for that year.
What if I want to change my Mini ISA?
You can only open one ISA of any particular type in a tax year, which runs from 6th April to 5th April of the following year.
For example, you can only open one Mini Cash ISA a year. If you change your mind after you have opened a Mini Cash ISA with one provider and want to start saving with another you can, but you will need to ask your new provider to transfer your savings into the new account for you. You cannot just close your account and open up a new ISA somewhere else or your existing ISA will cease to qualify for tax relief.
If you have any questions ask your bank or building society, or ring the ISA helpline on 0845 604 1701.
What’s the difference between a Stakeholder Saving Mini Cash ISA and the other Mini Cash ISAs on the market?
In a Stakeholder Saving mini-cash ISA —
- The interest rate can’t be less than 1% below Bank of England base rates
- The Bank or Building Society must accept a minimum payment of £10 into the account (although they can accept less if they want)
- You can withdraw your money as often as you like (although the Bank or Building Society might ask for 7 days notice).
Interested in the Stakeholder Saving Savings Account and Mini Cash ISA?
