Would it be better to start a new ISA with a different company or combine it with my existing ISA?

23 June 2021

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Question by Matthew

I have a Shares ISA with £100,000 invested and a 3-year Cash ISA also with £100,000 in it which matures next year. Cash interest rates are terrible, so I plan to transfer my Cash ISA into a Shares ISA. What I would like to know is, would it be better to start a new SISA with a different company or combine it with my existing SISA to form a £200K pot? I am very happy with my SISA provider (Nutmeg), but am concerned about what happens if Nutmeg went south and the protections I would be relying on. Would it be safer to keep two separate £100K SISAs?


Answered by Mike Clarke

Hello Matthew

Regulated stocks and share ISA’s have to have segregated accounts and your money will be either sat on deposit with a custodian or invested in funds (such as fidelity, Jupiter or direct equities). This being the case if Nutmeg were to fail, although it would be an inconvenience, the money invested will still be in the same place.

In the highly unlikely event that Nutmeg failed to comply with the very strict regulations, and accountability with investors capital, and you suffered a loss as a result, you will have some investor protection, but not to the value of £200,000, it would be closer to £50,000.

Hope that helps

Regards

Answered by

Mike Clarke

Chartered Independent Financial Planner

I’ve been in the industry since 1995, and during that time I have found myself mainly advising business people, the self- employed and high earning public sector employees. I love the motivation and challenge of advising someone who’s circumstances are changing all the time as there’s a greater need for a financial advice.