All you need to know about switching your ISA funds
Transferring an ISA isn’t complicated, but you do have to take the correct steps to avoid losing the tax free benefit
Key takeaways
ISAs are a tax efficient way to save with an annual allowance of £20,000
Rules introduced in 2024 mean you can save in as many ISAs as you'd like
You can make partial transfers, but not all banks offer this
Individual Savings Accounts (ISAs) offer a tax free way to save and invest. With an annual allowance of £20,000, they are popular with many savers and investors.
But what happens when you find a better deal or your financial goals change?
Transferring your existing ISA to a new account is a straightforward process, but it's crucial to do it correctly to retain its tax free status.
What is an ISA transfer?
An ISA transfer is the process of moving your savings from an existing ISA account to a new ISA account. This can be done between different types of ISAs, such as from a cash ISA to a stocks and shares ISA, or you can move money between the same type of ISA but with different providers.
When you transfer money between ISAs, it’s crucial that you don’t physically moving the funds yourself. Instead, the new ISA provider will move the money over, to ensure that the tax-free status remains intact.
Can you transfer all types of ISA?
Not all banks and building societies accept transfers. This is particularly true for top-paying, fixed rate cash ISA accounts that may only be open to new funds for the current tax year. Before opening a new ISA, check to see if transfers are allowed.
What should I consider before transferring an ISA?
Before you transfer money from one ISA to another, there are several factors to consider:
Does the ISA you'd like to transfer your money into offer better returns than your current one?
Can the ISA you're transferring to accept transfers from other accounts?
Are there any charges or penalties for transferring your ISA?
Remember, always use the new provider's transfer system to avoid any tax complications.
What are the benefits of transferring an ISA?
Transferring your ISA can offer several advantages:
Access to potentially better interest rates on your savings or investments
Consolidation of multiple ISAs into one account for easier management
The transfer process is typically simple as it is handled by the new provider
How do I transfer an ISA?
The process for transferring an ISA is similar whether you're dealing with cash or stocks and shares ISAs. However, fees and transfer times may vary. Here's what you need to do:
Compare ISA deals to find the best option for your needs
Check for any charges that may apply to your transfer
Look to see if the new ISA allows transfers in
Request the transfer by filling out a form provided by the ISA provider you're transferring to
Will I be charged for transferring an ISA?
You might be charged for moving an ISA but it all depends on the type of transfer:
Transferring between cash ISAs or into a stocks and shares ISA is usually free, unless you're moving money from a fixed rate, fixed-term account that has an early withdrawal penalty
Moving from a stocks and shares ISA to a cash ISA might involve transaction charges
How long do ISA transfers take?
The time it takes to transfer an ISA varies depending on the account type and method:
Cash ISA transfers: These typically take up to 15 working days
Cash to stocks and shares ISA transfers: These can take around 30 days
Stocks and shares to cash ISA transfers: Also allow up to 30 days, but this can depend on the types of investments you hold
Transferring between stocks and shares ISAs: This process can take up to three months
Can I book an ISA transfer in advance?
Yes, you can transfer an ISA at any time, and request this in advance and as long as you request it for after the maturity date, you should avoid early closure charges.
Can I withdraw money during the ISA transfer?
Policies on withdrawals during an ISA transfer vary. Some may allow partial withdrawals, while others may not permit any withdrawals until the transfer is complete. If you’re unsure, check the terms and conditions with your ISA provider.
What should I do if I want to complain about an ISA transfer?
If you encounter issues with an ISA transfer, follow these steps:
Start with the bank or building society's official complaints procedure for transfers for
savings accounts
Provide all necessary evidence to support your complaint
Wait eight weeks for a response from the provider
If you're not satisfied with the outcome, you can escalate the matter to the free Financial Ombudsman Service
How to choose the best ISA to transfer to
When selecting the best ISA for your transfer, consider the following:
For cash ISAs, look at the risk, interest rates, and any potential penalties for early withdrawal. If you feel you might need access to your money, take a look at easy access ISAs too
For stocks and shares ISAs, assess the risk level, transfer costs, and ongoing fees.
Other useful guides
To further your understanding of ISAs and related topics, explore these resources:
Our guide to ISAs provides an in-depth look at the different types of ISAs and how they can benefit you.
How changing interest rates affect your savings offers insights into the impact of interest rate fluctuations.
A guide to Lifetime ISAs explains the benefits and rules of Lifetime ISAs, as a long-term savings option.
Our innovative finance ISAs page looks at how this newer class of ISA uses peer-to-peer lending to offer impressive returns
Compare ISAs with MoneySuperMarket
Before you choose a new ISA account it’s important to shop around and compare the different types of ISA on offer and the potential returns they offer.
MoneySuperMarket can help with your search as we list ISA accounts from a range of leading UK providers.
You can compare rates of all our best savings accounts – see if they’re fixed or variable rates – or if they include a bonus rate. Once you’ve made your choice you can simply click through to the provider to start with the opening of your new ISA.
