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ISA transfers explained

All you need to know about switching your ISA funds

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Written by  Tim Heming
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Reviewed by  Ella Jukwey
5 min read
Updated: 11 Oct 2023

Transferring an ISA isn’t complicated, but you do have to take the correct steps to avoid losing the tax-free benefit

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ISAs are a way of saving and investing tax-free. While there is a £20,000 limit on how much we can put into a cash or stocks and shares ISA each year, we can also transfer existing ISAs from previous tax years – where the interest rate might have fallen or where the investments aren’t performing well. 

Transferring ISAs isn’t difficult but you have to do it in the correct way to maintain the tax-free status of your cash. Here we explain the rules around ISA transfers and simplify what you need to do.

What is an ISA transfer?

An ISA transfer means moving your savings from one ISA account to another without losing your tax-free status. You can transfer both cash ISAs and stocks and shares ISAs.

Crucially, however, it does not involve you physically removing the funds from one bank or investment company and investing them with another.

Instead, you need to contact your new ISA provider to help you with the transfer. This is to ensure you keep the money within its tax-free wrapper.

Be aware that not all ISA providers and ISAs will accept transfers. This can often be the case for the top paying cash ISA accounts, which are only open to new ISA funds in the current tax year, for example.

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What should I consider before transferring an ISA?

  • Will the new ISA will give you a better return than the existing ISA

  • Does the new ISA accept transfers into it

  • Will I face any charges for making the transfer

Always remember to contact your new ISA provider and use their transfer system. If you just withdraw the funds, your money will lose its tax-free status.

What are the benefits of transferring an ISA?

The main benefits of transferring an ISA are as follows:

  • As well as keeping the savings tax-free, most customers transfer ISAs to gain better returns on their money. (It’s common for interest rates to fall after an introductory period).

  • If you have several ISAs you may want to transfer all of your money to one place to make it easier to manage your savings.

  • Transfers are commonplace and easy to do. This means customers shouldn’t be put off from switching if they find a better rate elsewhere.

How do I transfer an ISA?

The ISA transfer process is the same whether you’re transferring from a cash ISA or stocks and shares ISA. The only difference might be if there are fees to pay, and some transfers take different lengths of time. 

1. Compare ISA deals Make sure the new ISA you choose allows transfers in.

2. Check whether you’ll face any charges This might be for transferring the money because you have a fixed term cash ISA, or the need to sell existing shares in a stocks and shares ISA. Weigh up whether it’s worth paying the penalty.

3. Ask your new provider to arrange the transfer They’ll supply an ISA transfer form, which can usually be completed and submitted online.

Will I be charged for transferring an ISA?

It depends on what type of ISA transfer you want to do

  • If you are transferring between cash ISAs, or from a cash ISA into a stocks and shares ISA, you may not be charged – exceptions include if you have a fixed term account which hasn’t yet reached maturity. In this case there may be a penalty to leave the fixed term account early.

  • If you are transferring a stocks and shares ISA to a cash ISA look out for transaction charges which cover the cost of selling the assets in your stocks and shares ISA. This transfer out or exit fee could be up to 3% of your stocks and shares ISA balance.

How long do ISA transfers take?

The time for an ISA transfer will depend on the type of account and transfer. Here is a summary: 

Transferring between cash ISAs 

The process should take up to 15 working days. If it takes longer, contact your new provider to complain. They are obliged to cover any loss of interest.

Transferring from a cash ISA to a stocks and shares ISA 

A cash ISA to a stocks and shares ISA can take up to 30 days. 

Transferring from a stocks and shares ISA to a cash ISA 

Allow 30 days to complete the transfer, but it depends on what types of investments you have. Unit trusts take longer to cash in than shares, for example. Your cash ISA provider should give you a form in which you list the investments you want to sell.

Transferring between stocks and shares ISAs

It may take around a month to complete the transfer but can take as long as three months because some investments are more complicated 

What are the ISA transfer rules?

  1. Contact your new provider to arrange the transfer. This is the golden rule of ISA transfers and will stop you withdrawing your money as cash and losing its tax-free status. Fill in the ISA transfer form they provide.

  2. You can transfer all or part of previous years’ savings to a new ISA account. However, if you want to transfer money paid into an ISA in this tax year, you must transfer all of it.

  3. You can transfer as many times as you like. There’s no limit to the number of ISA transfers you can make.

  4. Remember FSCS rules. You could choose to transfer your old ISAs into a single new account each year, but remember the Financial Services Compensation Scheme (FSCS) will only guarantee the first £85,000 saved with a single financial institution – so consider sticking within this limit.

Can I withdraw money during the ISA transfer?

If you do need to withdraw money from your ISA account during a transfer, you should check with your ISA provider to see what their policy is.

Some providers may allow partial withdrawals during a transfer, while others may require you to complete the transfer first before making any withdrawals.

What should I do if I want to complain about an ISA transfer?

If you want to complain about an ISA transfer, the ISA providers in question should have a complaints procedure you can follow.

This will involve contacting them to explain the nature of your complaint and supplying any supporting evidence. They must give you their final response within eight weeks. 

If you are not satisfied with the resolution they offer, you can take your case to the Financial Ombudsman.

They will try to establish the facts before making a ruling that the ISA provider must comply with.

How to choose the best ISA to transfer to

This depends on a range of factors and personal preference.

You can minimise risk by transferring your money to a cash ISA. Look at the interest rates to see which cash ISAs give the best return – and those that will accept transfers.

If you’re prepared to lock your money away for longer you might get a higher interest rate, but you’ll be penalised if you want to access the money before the fixed term ends. 

If you’re looking to invest, you could transfer to a stocks and shares ISA. Research the account to check that you’re happy with the level of risk because investments can go up and down.

Before transferring to a stocks and shares ISAs, check the cost of transferring money out of an existing account and the set-up, platform, management or ongoing costs.

Other useful guides

Compare ISAs with MoneySuperMarket

Comparing ISAs is straightforward with MoneySuperMarket. We’ve a wide range of cash ISAs and stocks and shares ISAs available from leading providers across the market.  

You can compare options such as the type of account and initial interest rate you’ll receive for cash ISAs. For stocks and shares ISAs you can see how the account is managed and any minimum deposits you’ll need to invest to get it underway.

Cash ISAs