The ultimate guide to transferring ISAs

A guide to transferring ISAs

In this guide, we explore the simple steps you can take to transfer your ISA and make the most of your savings. We cover everything you need to know, from the benefits of transferring to the process itself.

Can you transfer from one ISA to another?

You can easily move your money from one ISA to another. This could mean changing to a different bank or building society or switching between different types of ISAs.

Why transfer an ISA?

There are a few reasons you might want to transfer your ISA:

• Better interest rates: Switching to another provider with higher interest rates can help you earn more money over time.
• Different ISA type: If your investment goals have changed, you might want to switch to a different kind of ISA.
• More investment opportunities: Moving your Stocks and Shares ISA to a new provider might give you access to more investment opportunities that better match your goals.
• Easier management: If you have lots of old Cash ISAs, combining them into one can make managing your money simpler. 

How to transfer an ISA

Transferring an ISA is straightforward – your new provider will handle most of it. Just follow these steps:

• 1. Look at the ISA deals available to find one that suits you.
• 2. Check with both your current and new providers if you can transfer and if there are any fees.
• 3. Tell your new provider you want to transfer your ISA to them.
• 4. Fill out the ISA transfer form from your new provider. You’ll typically do this online, although some providers may send you a paper version.
• 5. Submit the ISA transfer form and wait for your new provider to confirm that the transfer is complete.

How long does an ISA transfer take?

The duration of an ISA transfer varies based on the type of transfer. According to the UK Government website, transferring from one Cash ISA to another typically takes no more than 15 working days. However, if you’re transferring between different types of ISAs, such as from a Cash ISA to a Stocks and Shares ISA, you should allow up to 30 calendar days for the process to complete.

Is there a charge for transferring an ISA?

Transferring your ISA might incur costs, depending on the type of ISA and your provider. Some providers may charge transfer fees. Therefore, it’s essential to review the terms and conditions of your current account before applying.  If you're under the age of 60 and transferring money out of an ISA, some providers will charge you a 25% fee.   

What’s the best time to transfer an ISA?

There’s no right or wrong time to transfer an ISA – it depends on your individual circumstances. You can submit an ISA transfer at any time, so it’s crucial to ensure that the transfer aligns with your personal investment goals and is the right decision for you.

What are the ISA transfer rules?

here are a few rules to be aware of when it comes to ISA transfers:

• You can part-transfer savings from your ISA to another, either from the current tax year or from previous years.
• There isn’t a limit to the number of ISA transfers you can make.
• You must use the transfer system that your new ISA provider offers and fill in their ISA transfer form.

Additionally, there are a couple of rules to keep in mind when it comes to whether ISA transfers affect your allowance and transferring between ISA types.

Do ISA transfers count towards your allowance?

If you follow the proper process, transferring your ISA won’t impact your annual allowance. By completing the ISA transfer form before moving your funds, your allowance for the current tax year remains unchanged, allowing you to continue contributing up to the annual limit.

For instance, if you have a Cash ISA and have already contributed £15,000, transferring that amount to another Cash ISA won’t affect your annual allowance. Your allowance remains £20,000, so you can still contribute an additional £5,000 for the rest of the tax year.

 Transferring between different ISA types

Transferring between different ISAs is a common practice. For instance, as investment goals change, an individual might choose to move from a Stocks and Shares ISA, which carries higher risk, to a Cash ISA, offering a more secure savings option.

Generally, the transfer process is straightforward. However, it becomes more complex if you’re under 60 and transferring out of a Lifetime ISA due to the 25% withdrawal charge.