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ISA transfers explained

All you need to know about switching your ISA funds

Victoria Russell
Written by  Victoria Russell
5 min read
Updated: 02 May 2024

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're able to make partial transfers but check if your provider offers this.

Individual Savings Accounts (ISAs) are a cornerstone of personal finance in the UK, offering a tax-efficient way to save and invest. With an annual allowance of £20,000, ISAs are a popular choice for many savers and investors.

But what happens when you find a better deal or your financial goals change? The good news is that you can now transfer your ISAs from this year and previous tax years to a new provider that may offer potentially better options, all while maintaining your tax-free benefits.

Transferring your ISA is a straightforward process, but it's crucial to do it correctly to retain its tax-free status. This article aims to demystify the rules and simplify the process, ensuring you can make informed decisions about your savings and investments.

woman with laptop showing MoneySuperMarket on her lap

What is an ISA transfer?

An ISA transfer is the process of moving your savings from one ISA account to another. This can be done between different types of ISAs, such as from a cash ISA to a stocks and shares ISA, and vice versa.

The key to a successful transfer is that it doesn't involve physically moving the funds yourself. Instead, it's orchestrated through the new ISA provider to ensure that the tax-free status remains intact.

However, it's important to note that not all ISA providers accept transfers. This is particularly true for top-paying cash ISA accounts that may only be open to new funds for the current tax year.

What should I consider before transferring an ISA?

Before you initiate an ISA transfer, there are several factors to consider:

  • Does the new ISA offer better returns than your current one?

  • Can the new ISA 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 returns on your savings or investments.

  • Consolidation of multiple ISAs into one account for easier management

  • The transfer process is typically simple and 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:

  1. Compare ISA deals to find the best option for your needs

  2. Check for any charges that may apply to your transfer

  3. Request the transfer by filling out a form provided by your new ISA provider

Will I be charged for transferring an ISA?

Whether you'll incur charges during an ISA transfer 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-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

What are the ISA transfer rules?

When transferring an ISA, there are several key rules to keep in mind:

  1. Always use the transfer system provided by the new ISA provider

  2. You can transfer some or all savings from the current tax year's ISA or previous years

  3. There's no limit on the frequency of transfers

  4. Consider the Financial Services Compensation Scheme (FSCS) protection limits

Can I withdraw money during the ISA transfer?

Policies on withdrawals during an ISA transfer vary by provider. Some may allow partial withdrawals, while others may not permit any withdrawals until the transfer is complete.

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 provider's official complaints procedure

  • Provide all necessary evidence to support your complaint

  • If you're not satisfied with the outcome, you can escalate the matter to the 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 potential penalties for early withdrawal.

  • 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:

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 – 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.

Cash ISAs