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Got no money? You can still use your Isa allowance

lost found signpostVirgin sent me a letter last week to check if I was still alive. Bless! They didn’t quite say it like that, of course. It was more along the lines of: ‘We’re worried your details aren’t correct’. I knew what they really meant though.

Virgin was right to be concerned. There had been no activity on my account since I opened it some three years ago. I could indeed have run away with the circus or been captured by Somalian pirates for squillions in ransom. After three years (some banks can go up to five) my account would have been deemed ‘dormant’ and the cash shuffled off to the big government social fund which hands out mislaid cash to good causes. If this happens to you, you can of course reclaim it. There’s a special service run by a few banks, My Lost Account, which searches for your account for free here.

In my case, I had just been too lazy to monitor it. I duly replied by post that I was still hale and hearty but this wasn’t good enough. As I had opened my account online, I had to necromance it via the internet too. This took several hours trying to navigate Virgin’s security systems by remembering all the old passwords (when did Carrot 595 mean anything?) and question answers. Eventually I cracked it and the upshot is that I have several thousand pounds in cash which I’d sort of forgotten about.

Virgin actually did themselves a disservice because their memory jog prompted me to check the interest rate. Execrable! I immediately transferred the money to a better account with another provider – is actually what I didn’t do. Having spent all that time relearning passwords, there was no way I was going to set about a new system (and I should have) so I stuck with Virgin. But I did move the money into a cash Isa.

I haven’t got any new money to put into my Isa  this year so I was really pleased to use up some of my tax-free allowance with this stale cash. I put it in the Virgin 1 Year Fixed Rate Cash E-Isa which pays 1.5%. The rate doesn’t seem very juicy, especially when I can’t touch it for a year. But, when you compare it on Moneyfacts (this is a good resource for finding top-paying accounts easily) it’s actually quite close to the top of the tables.

I could get a better rate outside of the cash Isa. But I might not keep this money in cash forever. I might want to move it into shares (still in the Isa) at some stage and, with any luck, the gains will then be tax-free. When you open these savings accounts, it doesn’t seem likely that you’ll ever make loads of money, but you’d be surprised. Twenty years down the line, dividends have added up and it’s galling to pay tax on your own careful savings. So have a look in the back of the drawer: you never know what you might find.

This blog features in the Monday Money linky with posts from top money bloggers Lynn from Mrs Mummy PennyFaith from Much More With Less and Emma from EmmaDrew.Info 

See our SMM guide to savings accounts here.

 

 

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Comments 4

Guest - Ruth Makes Money on Monday, 23 April 2018 19:05

I had no idea that the banks send the money off to a government fund if an account is dormant! Great reminder though to make sure that your money is working for you :-)

I had no idea that the banks send the money off to a government fund if an account is dormant! Great reminder though to make sure that your money is working for you :-)
Guest - Emma Drew on Wednesday, 25 April 2018 08:15

Oh wow, I hadn't realised it could only be as little as 3 years before a bank account is classed as dormant!

Oh wow, I hadn't realised it could only be as little as 3 years before a bank account is classed as dormant!
Jane Wallace on Wednesday, 25 April 2018 08:47

Apparently it can be after as little as a year, especially for current accounts! Each bank has its own definition although the government is sticking with 15 years of inactivity to be dormant.

Apparently it can be after as little as a year, especially for current accounts! Each bank has its own definition although the government is sticking with 15 years of inactivity to be dormant.
Eleanor Kiy on Sunday, 29 April 2018 16:43

Wow nice surprise to find some cash you'd forgotten about. Good call transferring your Isa, even 1.5% interest has got to be worth more than bugger all. Thanks so much for taking part in #MondayMoney!

Wow nice surprise to find some cash you'd forgotten about. Good call transferring your Isa, even 1.5% interest has got to be worth more than bugger all. Thanks so much for taking part in #MondayMoney!
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Thursday, 13 December 2018