How can I transfer an ISA?

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An ISA offers you the opportunity to take advantage of some tax benefits when saving. However, in some cases, it is worth thinking about moving your ISA to benefit from better conditions. In this article, we explain why it can be profitable to transfer your ISA, how it works, and answer the most commonly asked questions on the topic of how to transfer an ISA.

ISA stands for Individual Savings Account and is a type of savings or investment account in the UK. ISAs offer certain tax advantages and were introduced by the government to help people grow their savings or investments without them losing money from tax on the returns.

There are different types of ISAs:

• Cash ISA: A cash ISA allows you to save money tax-free in a simple savings account, with no tax on interest earned.
• Stocks and shares ISA: A stocks and shares ISA allows you to invest in stocks, bonds, and funds, with no tax on capital gains or dividends.
• Junior ISA: A junior ISA is a tax-free savings or investment account specifically for children, which they can access once they turn 18.
• Lifetime ISA: A lifetime ISA helps you save for retirement or a first home, for example, offering a government bonus of 25% on contributions.
• Innovative finance ISA: An innovative finance ISA allows you to lend money through peer-to-peer lending platforms, earning tax-free interest on loans.

Can I transfer from one ISA to another? Yes, and there are multiple reasons why you may choose to move your ISA. Here are some aspects, which might be interesting if you’re thinking about a transfer:

• Interest rates: One of the most common reasons to transfer your ISA are better interest rates. Sometimes, new providers will also allow you to take advantage of promotional offers.
• Investment opportunities: If you have a stocks and shares ISA and want to access a wider range of investment options, you might consider looking for a different provider and move your ISAs.
• Customer service: The general user experience and customer service can vary between ISA providers. Sometimes, you might find it hard to use their online platform, or you are generally unhappy with your provider’s customer support. In this case, other providers might offer you a better service or an easier platform to use.
• Fees: You can reduce costs by moving your ISA, as a different provider may charge lower annual management fees and transaction costs.
• Financial goals: Your financial goals can change over time. If your objectives, including retirement planning, buying a house, or funding education, no longer meet your financial goals, it is time to transfer your ISA to a provider that better suits your goals and lifestyle.
• New features and benefits: Many ISA providers offer different benefits or even additional features. These can include cashback rewards or bonus interest rates. Moving your ISA might allow you to claim these new features and benefits and can enhance your savings or investment strategy.
• Management: It is possible to have several ISAs with different providers, however, managing these accounts can be easier if you move them to a single provider.

There is no right or best time to transfer your ISA, as it is down to your own personal circumstances. ISAs can be transferred at any time. To prepare for the transfer, make yourself familiar with the complete process, do thorough research on potential new providers, or speak to an expert. In addition, check the market conditions, whether you prioritise growth or safety, and what your own financial goals are before you transfer your ISA.

If you want to transfer your ISA with a different provider, this is what you need to do:

• Find a new provider and ISA you want to transfer your current ISA to
• Make sure you know about any possible terms and conditions or charges before you change your ISA
• Contact your new ISA provider
• Fill out the provided ISA transfer form (online or in paper form)
• Do not close your account or withdraw the funds yourself, as you will then lose the tax advantages of the ISA
• The transfer will be handled by your chosen new ISA provider

These rules apply when you want to transfer your ISA. Make yourself familiar with them before you start the process of the ISA transfer.

• Rule 1: You can transfer the funds of your cash or stocks and shares ISA to another of the same type with a different provider without affecting your annual ISA allowance.
• Rule 2: It is also possible to transfer the funds between different types of ISA, for example, from a cash ISA to a stocks and shares ISA, or vice versa. In this case, make sure you check with your new provider if a change to a different type of ISA is accepted.
• Rule 3: Generally, transferring your ISA does not affect your annual ISA allowance. This means that if you transfer your funds, it does not count towards your annual ISA subscription limit.
• Rule 4: Be aware that not every transfer is free of charge. Check with your new providers if they may charge you fees for your ISA transfer.

According to the UK government’s website, cash ISA transfers should take no longer than 15 working days. For any other type of ISA, the transfer can take up to 30 days. This means the process usually takes between 2–4 weeks, depending on the type of ISA and also the provider. During the transferring process, you should get regular updates from your current and your new provider.

No, transferring your ISA does not count as opening a new one. When you transfer your ISA, you are moving funds from one provider to another, or from one type of ISA to another, within the ISA rules, which is different from opening a new account.

The rules for opening an ISA state that for each tax year, you are allowed to open one of each type of ISA, and moving your existing ISA does not affect this allowance.

Whether you will be charged for an ISA transfer depends on the type of transfer:

• Cash ISA to stocks and shares ISA: This type of transfer is usually free, however, in some cases, moving money from a fixed rate or fixed-term account that has an early withdrawal penalty will incur charges.
• Stocks and shares ISA to cash ISA: This type of transfer might involve transaction charges, depending on the provider. The actual transfer is free, but charges can include exit charges, dealing fees, or other administrative fees.

An ISA is not the only option when it comes to saving money. Although we don’t currently offer ISAs at Raisin UK, there are many other types of savings accounts from our partner banks and building societies through our marketplace. For example, fixed rate bonds can be a good alternative to ISAs, especially if you’re a long-term saver. They typically offer competitive interest rates in return for locking away your money for a set period, usually between six months and five years. Generally speaking, the longer the term, the higher the interest you’ll receive at the end.

If you want to transfer your ISA funds to a Raisin UK account, you need to withdraw your money from your ISA first and then close the account. Afterwards, you can open a free Raisin UK Account. Then you can apply by logging in, choosing and applying for a savings account, and transferring your money from your Nominated Account. Find out more here.

While you now know how to transfer an ISA, it can also be worth checking you’re getting the most from your savings by looking at other savings accounts. At Raisin UK, you can currently take advantage of competitive rates on fixed rate bonds. It’s easy to get started. Simply register for a free Raisin UK Account, apply to open a savings account, and deposit your funds.