10 things you should know about ISA transfers

If you haven’t transferred an ISA or Junior ISA between providers before you’ll probably have a few questions about how it works.

Here’s 10 things everyone needs to know about ISA transfers

1. What is an ISA transfer?

An ISA transfer is a process that lets you move money you’ve built up in your ISAs over previous tax years to a new provider and keep its tax-free benefits. The good news is there’s no limit to the number of ISAs or Junior ISAs you can transfer between providers, and you can transfer them at any time. You can also choose to transfer the total value of an ISA or just a portion of it, although ISAs that you’ve opened or paid into in the current tax year must be transferred in full. However, from April 2024 you will be allowed to partially transfer ISA funds you’ve opened or paid in the current tax year.

 2. How do ISA transfers work?

Transferring an ISA or Junior ISA from one provider to another might sound like a lot of work. But it’s actually a relatively simple process. Once you give your new provider your transfer instruction they do the hard work for you, contacting your existing ISA provider and managing the transfer on your behalf.

3. What happens if I withdraw money from my ISA?

When it comes to Stocks and Shares and Cash ISAs, as a rule you should never withdraw your money if you’re looking to move it somewhere new. This will cause it to lose its tax-free status when you come to reinvest it. Always use your new provider’s transfer service to make sure your money remains tax-free.

4. Will it affect my ISA allowance for this year?

No, your current ISA allowance will not be affected by any ISAs you transfer between providers.

5. How long will it take to transfer an ISA?

This will naturally vary between providers, but the transfer must be completed within 30 days.

6. How much will it cost me?

If there are any charges to transfer your ISA they will differ among providers. It’s always worth checking with both your current and your future ISA provider to find out if there are any fees or penalties you’ll need to pay if you transfer.

7. Is there a limit on the value of ISAs I want to transfer?

No, you can transfer an ISA of any value between providers as long as it meets the minimum investment levels of your new provider.

8. Can I transfer a Stocks and Shares ISA into a Cash ISA and vice versa?

Yes.

9. What about a Lifetime ISA?

If you want to transfer a Lifetime ISA to a different type of ISA and you’re under 60 years old, remember you’ll have a withdrawal fee of 25% to pay.

10. Always check the fees

With a new provider there could also be platform fees, ongoing charges or lock-in periods to be aware of before you make your transfer decision. But checking this before you start your transfer means there’s less chance of any surprises further down the line.

It’s also important not to presume that moving your ISA to a new provider will mean better financial returns. The performance of your investment will be determined by the portfolios or funds you invest your money in, not the provider. For cash ISAs the performance will likely be determined by the interest paid.

To find out if transferring an ISA is right for you, we recommend you speak to a financial adviser. If you don’t already have one you can find one on our ‘Get financial advice’ page.

Things to remember:

• Never withdraw your money if you want to transfer an ISA
• Make sure you use your new provider’s ISA transfer service
• Always check for charges with both your old and new provider
• ISA transfers can be done at any time and won’t affect your current ISA allowance
• You can transfer as many Stocks and Shares and Cash ISAs as you like
• Make sure you know what your money’s invested in

If you are interested in transferring an ISA or Junior ISA to M&G you can find more information on our website.

The views expressed in this article should not be taken as a recommendation, advice or forecast. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser.

The tax rules for ISAs and Junior ISAs may change in the future, and their tax advantages depend on your individual circumstances.

The value of your investment can go down as well as up so you might not get back the amount you put in.

Please note, your current provider may apply a charge when you transfer your investment and also that, whilst your investment is being transferred, it will be out of the market for a short period of time and will not lose or gain in value.