Do you know more about ISAs than your bank? In a recent survey by Which?, the consumer group, only 16 out of 180 advisers gave correct answers to all its questions about ISAs. Of the 15 major providers contacted, advisers at National Savings and Investment came top with 72 per cent correct answers. The worst major bank got only 33 per cent.
Nutmegonomics has devised its own ISA quiz. Can you beat your bank?
1) What does ISA stand for?
a) I Save Annually
b) Industry Standard Account
c) Individual Savings Account
d) Institutional Savings Account
2) How old do you have to be to open a Cash ISA?
d) Your father and your mother must have been born between 1947 and 1949
3) How old do you have to be to open a Stocks and Shares ISA?
c) Any age, as long as you earn between £20,000 and £24,999 per year and don’t work for a financial institution
4) Which of these people can open an ISA?
a) Residents in the UK for tax purposes
b) Crown employees working overseas, such as diplomats or members of the Armed Forces
c) The spouses or civil partners of crown employees
d) Anyone who put their religion as Jedi in the latest census
5) Which of these are acceptable ways of spreading your ISA allowance?
a) £5,640 in a Cash ISA and £5,640 in a Stocks and Shares ISA
b) £3,000 in a Cash ISA and £8,280 in a Stocks and Shares ISA
c) Nothing in a Cash ISA and £11,280 in a Stocks and Shares ISA
d) £107.93 in a Cash ISA and £1,234.78 in a Stocks and Shares ISA
6) How do you transfer an ISA from one provider to another?
a) You ask the new provider to make the transfer
b) You close your existing ISA and make the transfer yourself
c) You write to HMRC
d) You must appoint an IFA to do it for you
7) How many active Cash ISAs can you hold each year?
d) As many as you like, as long as you don’t go over the limit
8) How many Cash ISAs can you hold in total?
c) You divide your age by your shoe size
d) As many as you like, as long as you don’t pay into more than one per year
9) How many active Stocks and Shares ISAs can you have each year?
a) It depends on how many Cash ISAs you have
d) It depends on whether your investments have gone up or down
10) Can you transfer a Cash ISA to a Stocks and Shares ISA?
b) Yes – and you transfer it back at any time
c) Yes – but you can’t transfer it back to a Cash ISA
d) Only if they’re with the same provider
11) Can you make a partial ISA transfer of this tax year’s ISA?
c) Only if it’s a Stocks and Shares ISA
12) If you transfer this year’s Cash ISA worth £5,630 to a Stocks and Shares ISA – and make no further payments to this new Stocks and Shares ISA – how much more can you pay into a Cash ISA this tax year?
13) Can you make a partial transfer of previous ISAs from previous years?
b) It depends on your current ISA provider
c) It depends on your new ISA provider
14) What happens to your ISAs if you go abroad?
a) You must pay full tax on all your holdings before the end of the following tax year
b) Your existing ISA maintain their tax-free status but you cannot make any further contributions until you return from overseas
15) What can be held within a Stocks and Shares ISA?
a) Stocks and Shares
b) Corporate bonds
c) Unit trusts
d) A gold exchange traded fund
16) What happens to your ISAs if you die?
a) They are paid automatically into your pension
b) They become the property of the government
c) There is no tax to pay on income or capital gains up to that date, but your personal representatives will have to account for any income or gains afterwards
d) They pass to your children
4 a, b, c
5 a, b, c, d
12 b (money saved up to the date of transfer will be treated as if you had invested that money directly in the stocks and shares ISA)
15 a, b, c, d
How did you do?
0-6 correct answers
Not great. Do you work in customer service at a major bank? Why not swot up here – www.hmrc.gov.uk/isa/faqs.htm.
7-15 correct answers
Well done – you’ve beaten the majority of advisers at major banks.
16 correct answers
Busted – you already work in Nutmeg’s excellent customer support team
As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. A stocks and shares ISA may not be right for everyone and tax rules may change in the future. If you are unsure if an ISA is the right choice for you, please seek financial advice.