For many people, an ISA is a long-term financial investment. To maximise its potential, you should be prepared to set your money aside for several years. Though Flexible ISAs are available, including some with instant access, people generally want to store money in an ISA long-term. Of course, circumstances change, and so do ISA products, so what worked for you initially might not be the best option a year or two down the line.
You’re not stuck with a specific provider or a specific ISA product. You have a right to move your money by transferring to a different ISA.
- – What is an ISA? And, What are Stocks and Shares ISAs?
- – What Are the Different Types of ISAs Available?
- – What Are the Fees Associated With Investing in a Stocks and Shares ISA?
- – Choosing the Right ISA for You, What You Need To Know.
We update all our guides regularly. If you are researching ISAs and we haven’t got an exact guide that helps you, keep coming back as we update daily.
How an ISA transfer works
To transfer your money from one ISA to another, there’s a standard process to follow. Just withdrawing your money, then depositing elsewhere can mean that you lose all the tax-free benefits.
To keep your savings in their tax-free wrapper, you must use an ISA transfer service. That way, your new ISA won’t be classed as a whole new subscription.
People choose to transfer an ISA for a variety of reasons. Some decide to move to get better returns if their current ISA’s not doing well, whilst others might move their existing savings because they’ve got a new goal. You might be happy to lock your money away for a bit longer or to move from a Cash ISA to a Stocks and Shares ISA when you’re more comfortable taking bigger risks.
To make an ISA transfer, you should first decide where you plan to transfer your ISA too. Get in touch with your new provider and tell them where you’re moving money from. Your new provider should make contact with your existing provider; then, you’ll be asked to fill in some forms to confirm that you want to make the transfer.
An ISA transfer works a lot like the Current Account Switching Service. Your new provider deals with the transfer, so you don’t need to make the changes manually.
Can You Transfer an ISA to a New Provider?
At any time, you’re free to transfer your ISA to a different provider. Fees and charges may apply, especially if you were locked into a fixed-term investment.
To transfer your ISA to a new provider, find a suitable provider and product and then contact the target provider. You’ll likely be given some forms to fill in, and you may be asked to return these online or send them through the mail. The forms will allow you to specify how much money you’re planning to transfer.
Can You Transfer an ISA but Stay With Your Current Provider?
You don’t need to transfer to a new provider to take advantage of a better product. You can also transfer to a different product than your current provider offers.
You can also choose to do a partial transfer, keeping some of your money in your current ISA but moving a portion elsewhere. The only rule for a partial transfer is that you must be sure to transfer all money deposited in the current financial year.
What Are the Rules for Transferring ISAs?
You can transfer to a new provider or a new product with your existing one. You can also transfer to the same type of ISA or move your money to a different type. If you have a Cash ISA, you can transfer to a Stocks and Shares product. If your existing ISA is a Stocks and Shares ISA, you can transfer to a Cash ISA.
When you transfer your ISA, you can leave some of your savings behind. You’re allowed to have multiple ISAs, so you don’t need to close one in order to open another, but you must transfer any money you’ve invested during the current financial year. If you have an ISA containing £40,000 and you’ve added £7,000 this year, you must transfer out at least £7,000 as part of your ISA transfer.
Giving Notice for an ISA Transfer
ISA transfers don’t happen instantly. In many cases, you’ll need to give notice. You should expect a transfer to take up to 30 days, with transfers from Stocks and Shares usually taking longer because the shares need to be sold. Most Cash ISA transfers are complete within a couple of weeks.
Find out in your ISA product’s terms and conditions how much notice you’re required to give. If you’d invested your money in a fixed-term product, there may be extra charges applied for early cancellation. It might be better to wait until the end of your fixed term before you move your money elsewhere.
ISA Transfer Charges and Fees
Most providers will apply a Transfer Out Fee to ISA Transfer transactions. This is usually up to £50, but it could even be slightly more. Before you transfer your ISA, if you’re moving to save money, make sure that the Transfer Fee you are charged won’t erase the potential savings you’ll make.
If you have a Stocks and Shares ISA, you may be charged individual transaction fees for each fund that’s being sold. If possible, consolidate your investments before you try to transfer your ISA. Be careful not to consolidate too early because there are extra risks to having all your money invested in the same company.
Are There Limits to the Number of ISA Transfers You Can Make?
You can make as many ISA transfers as you want, but you must always make sure that the current year’s deposits are moved over in full every time.
Transferring ISA Funds to Someone Else
Your ISA is yours and yours alone. You can’t transfer an ISA to somebody else. If you want to do this, your only option is to withdraw your money from your ISA.
If you pass away, any money saved in your ISA will be automatically transferred to a spouse or civil partner tax-free., but whilst you’re alive, you can’t transfer funds to someone else. If you don’t have a spouse or civil partner, any money held in ISAs becomes part of your estate upon death.
How Can Money Savings Advice Help You if You Are Thinking About Investing in an ISA or Stocks & Shares ISA?
Here at Money Savings Advice, we have partnered with some of the UK’s leading ISA & Stocks & Share ISA Investment companies. They have already helped thousands of people invest safely and they can do the same for you.
Choosing an independent investment company means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these investment specialist, then click on the below and answer the very simple questions.