- What is an ISA transfer?
- Possible reasons for an ISA transfer
- 1. Reducing fees and charges
- 2. Consolidating multiple accounts
- 3. Changing your strategy
- 4. Poor service
- Types of ISA transfers
- ISA transfer rules
- 1. Use the transfer service
- 2. Transfer the total amount from the current tax year
- 3. Options for ISAs from previous years
- How to transfer an ISA
- How long does an ISA transfer take?
- Can you withdraw money while transferring?
- Transferring an ‘active’ Cash ISA
- Can you transfer an ISA to someone else?
- Things to look out for when transferring your ISA
- Not all ISAs accept inward transfers
- Fees and charges
- Penalty fees
- Should you transfer your ISA?
An ISA is a great way to invest and grow your savings tax free. If you already have one, then you can transfer it to another provider of your choosing, as long as you follow the ISA transfer rules. If you are considering an ISA transfer, then you’ve found the right article.
What is an ISA transfer?
An ISA transfer involves moving your savings or investments from one ISA account to another. And transfers can be executed on every type of isa account including:
- Cash ISA
- Stocks and Shares ISA (also known as an investment ISA)
- Lifetime ISA
- Innovative Finance ISA
- Junior ISA
For example, you can transfer your Cash ISA to a Stocks and Shares ISA, or transfer your ISA from one provider to another.
The key thing to remember is that it does not involve you physically removing the funds from one account or provider yourself and investing them with another.
Possible reasons for an ISA transfer
There are a number of reasons you might want to transfer your ISA. Below are four common examples.
1. Reducing fees and charges
Even if you have multiple Stocks and Shares ISAs with good providers, the fees can add up. This will have a negative effect on your investments in the long term. You may be able to find a cheaper deal from another ISA provider elsewhere.
2. Consolidating multiple accounts
Having multiple ISA accounts can potentially be confusing and difficult to manage. Transferring your ISA savings or investments into a single account can make it much easier to keep track of your savings and investments.
3. Changing your strategy
Perhaps you’ve always had a Cash ISA and are now considering investing some of your savings. Transferring your Cash ISA to a Stocks and Shares ISA will allow you to do this without impacting the annual ISA allowance.
4. Poor service
The returns and level of service you receive can vary from one ISA provider to another. If you think you are not getting the best deal from your existing provider, then you may want to consider moving your ISA.
Types of ISA transfers
There are three main types of ISA transfers available:
- Between different providers
- From one product to another with the same provider
- From one type of ISA to another (e.g., from a Cash ISA to a Stocks and Shares ISA)
The best option for you will depend on your personal circumstances.
ISA transfer rules
It is important to follow these rules when making a transfer. If you don’t, then you may end up losing out on your ISA’s tax benefit.
1. Use the transfer service
If you withdraw savings from previous years without using the transfer service or completing an ISA transfer form, then the sum added to a new ISA will be treated as the current year’s contribution. In effect, you will lose the tax-free allowance from the previous tax year.
2. Transfer the total amount from the current tax year
If you want to transfer an ISA in the current tax year, then you will need to transfer the whole amount to retain ISA status. You can continue to add savings up to the current personal annual ISA allowance of £20,000.
3. Options for ISAs from previous years
While you are limited in the type of transfer you can do with your current ISA, there are a greater number of options available for ISAs from previous years.
Transfers from previous years are unlimited, meaning you can make any number of ISA transfers in a given year, as long as you use the transfer service or complete an ISA transfer form. Similarly, there is no limit on the total amount that can be transferred from previous years. These transfers are not counted in your current year’s allowance.
So, for example, say you have a current ISA with £5,000 and you transfer in £20,000 from a different ISA that you opened last year. You can still save an additional £15,000 in your current ISA because the amount transferred is not counted in the current year’s personal allowance.
You also don’t have to transfer all of a previous year’s ISA. Some accounts will also allow you to transfer just a portion of an old ISA into a current one.
Good for long-term, cost-conscious investors who want lots of flexibility
Interactive Investor Stocks and Shares ISA *
| Trading Commission | From £3.99‡ |
| Account Management Fee | From £4.99† |
- Pros & Cons
- Fees & Charges
Pros
- Very cheap trading costs
- Flat-rate platform fee structure
- Inclusive free trades with some plans
Cons
- No dealing fee discount for frequent trading
- Some plans can be expensive for smaller portfolios
- Limited trading tools
Interactive Investor offers three different subscription plans – these are easy to switch between at a later date, should circumstances change.
Investor Essentials plan
Platform Fees:†
Monthly subscription fee: £4.99
Equities custody charge: covered by subscription fee
Fund management charge: covered by subscription fee
Note: the ‘Investor Essentials’ plan has a £50,000 investment limit; if this is exceeded the account will automatically be upgraded to the ‘Investor’ plan.
Dealing Fees‡:
UK shares & ETFs: £3.99
US shares: £3.99
Other international shares: £9.99
UK fund trades: £3.99
Investor plan
Platform Fees:†
Monthly subscription fee: £11.99
Equities custody charge: covered by subscription fee
Fund management charge: covered by subscription fee
Dealing Fees‡:
A monthly dealing credit, worth £3.99, is included as part of the account subscription and is valid for 31 days. (Equivalent to 1 free trade per month).
Additional trades are charged as follows:
UK shares & ETFs: £3.99
US shares: £3.99
Other international shares: £9.99
UK fund trades: £3.99
Super Investor plan
Platform Fees:†
Monthly subscription fee: £19.99
Equities custody charge: covered by subscription fee
Fund management charge: covered by subscription fee
Dealing Fees‡:
A monthly dealing credit, worth £7.98, is included as part of the account subscription and is valid for 31 days. (Equivalent to 2 free trades per month).
Additional trades are charged as follows:
UK shares & ETFs: £3.99
US shares: £3.99
Other international shares: £5.99
Fund trades: £3.99
Applicable to all plans
Regular investing service: free to use (£25 minimum investment amount, no dealing fees)
Spot + FX fees: 1.5%
Telephone dealing charge: £49
Note: For UK and US trades over £100,000, and other International share trades over £25,000 additional fees and charges apply. (See the Interactive Investor website for full details.)
How to transfer an ISA
The exact ISA transfer process will vary from provider to provider. The most important thing to remember is that you must use your provider’s ISA transfer service. Don’t try and withdraw the funds yourself.
To find out the specific details about how to do this, you should check with your provider. The information should be displayed clearly on their website and in the documents you received when you first set up your ISA.
How long does an ISA transfer take?
If you’re transferring a Cash ISA, then it should take about three weeks. The government website states these transfers should take no more than 15 working days. Other types of transfers can take a bit longer — up to 30 calendar days.
Can you withdraw money while transferring?
You can’t withdraw money during the transfer process without losing your tax-free benefits. If you want to withdraw money, then it is better to wait until your transfer is complete.
Remember, certain ISAs — like the Lifetime ISA — have penalties if you withdraw money early or not for the intended purposes.
Transferring an ‘active’ Cash ISA
You can transfer an active Cash ISA to a new manager. If you transfer your current-year ISA, then your bank should tell your new ISA manager how much more you can pay in during the tax year without exceeding the allowance.
However, you can only have one ‘active’ Cash ISA each year, so you must transfer the full amount. You can’t split your allowance between different ISA managers.
Can you transfer an ISA to someone else?
No, you can’t directly transfer an ISA to someone else. If you want to move funds from your ISA to one in a different name, then you’ll need to withdraw your money or sell your investment and then give the funds to the other person.
Things to look out for when transferring your ISA
Before you commit to transferring your funds, there are some important considerations to think about.
Not all ISAs accept inward transfers
This varies between providers, so you should always check with them first to avoid being disappointed and not being able to place your ISA where you want.
Fees and charges
Many providers charge for an outward transfer, so it’s worth checking beforehand. This is particularly true if you’re moving to avoid higher fees. You could end up inadvertently paying more despite moving to a cheaper provider!
If you want to transfer a Stocks and Shares ISA, then you should also keep an eye out for any share dealing charges. These can add up quickly.
Penalty fees
Some transfers will incur penalty fees, which can become quite costly.
If you have a fixed-term account, then you will be charged a penalty fee if you transfer before the end of the term. Similarly, if you have a notice account, then you will be penalised if you move your funds before the end of the notice period.
Should you transfer your ISA?
This is a personal decision and one that will depend on your circumstances. If you are considering an ISA transfer, then it is worth speaking to your provider about the ISA transfer rules and their policies. Your provider will explain the terms and conditions that you need to know before you commit.
If you’re interested in transferring your Stocks and Shares ISA, then take a look at our top-rated Stocks and Shares ISAs to help you find the account that’s right for you.
Great for frequent investors or those who prefer funds
Hargreaves Lansdown Stocks and Shares ISA *
| Trading Commission | £5.95 – £11.95‡ |
| Account Management Fee | Up to 0.45%† |
- Pros & Cons
- Fees & Charges
Pros
- Plenty of investing resources and research material
- Cheap trading costs for active investors and free fund dealing
- Low platform fees for smaller portfolios
- £100 of free trades for new and existing clients.
Cons
- Expensive fees for fewer trades
- Structure of fees can be complicated
- Limited trading tools
Monthly subscription fee: £0
Equities custody charge: 0.45% (capped at £45/year)
Fund management charge:
On the first £0 to £250,000 = 0.45%,
On the value between £250,000 to £1m = 0.25%,
On the value between £1m and £2m = 0.1%,
On the value over £2m = free
UK shares & ETFs: £11.95 (for 0-9 trades in previous month), £8.95 (for 10-19 trades in previous month), £5.95 (for 20+ trades in previous month)
US shares & ETFs: £11.95 (for 0-9 trades in previous month), £8.95 (for 10-19 trades in previous month), £5.95 (for 20+ trades in previous month)
EU shares & ETFs: £11.95 (for 0-9 trades in previous month), £8.95 (for 10-19 trades in previous month), £5.95 (for 20+ trades in previous month)
Fund trades: £0
Spot + FX fees: 1%
Telephone dealing charge: 1% of trade value (£20 min/£50 max)
The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.