Shopping around for ISAs is a very sensible task. Doing so allows you to judge whether your money could be working harder, and determine if you can get everything you need from one provider rather than being split between several.
If you’ve got multiple ISAs and are looking to simplify your savings, fret not: ISA transfers are available to all account holders.
In this post, we explain the ISA transfer process, including how long it takes, how it works, and the considerations you should make before committing.
An ISA transfer describes the act of moving money from one or multiple ISAs into another. This can mean transferring one type of ISA into a different one, or transferring between providers.
Transfers can be done in full or in part, allowing account holders to keep their existing ISA in place.
For those concerned about their annual allowance, you’ll be pleased to know that combining ISA accounts does not count towards your ISA transfer limit for the tax year in which you merge accounts. For example, this means you can deposit into and transfer a cash ISA into another cash ISA, and still contribute up to £20,000 in that same tax year.
To further shed some light on the ISA transfer process, we’ve outlined exactly what happens during every step:
In addition to these steps, it’s worthwhile figuring out if there are any fees that your provider will charge you to transfer your ISA. Recent changes to transfers as of 2024 have also introduced the ability to partially transfer an ISA during the current subscription year, so it’s worth checking if your provider(s) offer this, too.
Read more: ISA rules on withdrawals, explained
Unlike current account switches, there technically isn’t a scheme in place to ensure or protect ISA transfers. However, there are two ISA transfer timescales to remember:
Although account holders don’t have the same level of guarantee that a current account switch would have, if the transfer exceeds these limits, they are encouraged to reach out to the Financial Ombudsman Service.
Account holders are the only ones who can pay into a cash ISA under their name. However, parents can contribute to their children’s Junior ISAs. The only way to effectively pay into someone else’s ISA is to transfer the funds to their current account. At this point, the person is free to use the money as they wish.
Having explained the ISA transfer process, let’s now look at some reasons why you’d want to do so:
Having your funds distributed across several ISAs can have its advantages but, at the same time, it can allow for confusion to quickly set in. Accidentally transferring your funds to the wrong ISA, to then have to move those funds back out and into the right one is an arduous process, but it can be avoided by consolidating your ISAs into manageable amounts.
Savings providers are always in competition with each other when it comes to their interest rates. While many are mainly guided by things like base rates and economic outlook, there’s also the threat of other providers to think of. Transferring an ISA from your existing provider to a new one can enable you to take advantage of higher interest rates on your savings.
Much like with a current account switch, once the necessary forms are filled out, the bulk of the ISA transfer process is automatic. Users aren’t required to manually move funds between the accounts – your provider(s) will handle all of the necessary measures, whether that’s moving the funds themselves or closing down old accounts as per your instruction.
We’ve got ISAs for most occasions at Aldermore.
If you’re a confident saver who can put money away for long periods, our limited access ISAs, like the single access or double access reward ISAs, are a great fit. With these, you benefit from a higher interest rate, provided you don’t exceed the withdrawal limits.
We also offer a range of cash ISAs, from easy access to fixed rate ISAs.