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ISA transfer rules: How to transfer an ISA

Last updated on: 16th March 2020

With an ISA, you can save or invest up to your annual allowance each year and earn tax-free returns. However, while building up your wealth every year is a step in the right direction, it's vital that you’re getting the best returns possible. This is where an ISA transfer can help.

The ISA transfer process is simple enough, but there are rules that need to be followed to ensure that your cash doesn't lose its tax-free status. In this guide, we'll explain how ISA transfers work and show you how to easily move your funds. 

We'll cover:

  • What is an ISA transfer?
  • Why should I transfer an ISA?
  • What are the ISA transfer rules?
  • How long does it take to transfer an ISA?
  • How do I transfer an ISA:
    • Cash ISA transfers
    • Stocks and Shares ISA transfers
    • Help to Buy ISA transfers
    • Innovative Finance ISA transfers
    • Junior ISA transfers
    • Lifetime ISA transfers

What is an ISA transfer?

An ISA transfer allows you to move money from one ISA provider to another without losing the tax-free wrapper. If you try to move ISA funds by withdrawing then re-subscribing, rather than going through the proper ISA transfer process, the funds will lose their tax-free status and will count as a new ISA subscription.

For example, let's say you subscribed £3,000 into a Cash ISA this tax year (2019/20) and haven't made any other subscriptions:

  • If you transferred this money to an IFISA, it wouldn't count towards your allowance again and so you would still have £17,000 of your £20,000 ISA allowance remaining.
  • If you withdrew this money and then invested it into an IFISA, it would count as a new subscription and so you would only have £14,000 of your £20,000 allowance remaining. 

So, the ISA transfer process can be crucial in helping you maximise ISA returns. You can usually transfer to a different product, a different ISA provider and/or a different type of ISA. 

 

Why should I transfer an ISA?

There are quite a few reasons why you might consider an ISA transfer:

  • Poor returns: The ISA rates available from other products may have improved since you opened your existing account. You could switch to take advantage of these better rates.
  • End of an introductory offer: Your existing ISA may have offered a better rate as part of an introductory offer and that may have ended. You could transfer and find another new offer or a better rate in the long-term.
  • Consolidation: If you have quite a few savings and investments, you may wish to transfer them all into one ISA account to make your finances more manageable.
  • Change in investment direction: Should you decide that you would rather move funds from, for instance, a Cash ISA to a Stocks and Shares ISA, or vice versa, you can rebalance your portfolio without impacting your ISA allowance.
  • Reducing costs: Some types of ISA, such as Stocks and Shares ISAs, may have a charge from the provider for their management. You may wish to find an account with a lower fee that will cost you much less in the long run.
  • New savings goals: If your financial situation has changed and you have new savings goals, you may wish to switch to an ISA that better suits your needs. For example, perhaps you already have a healthy amount of savings and now feel comfortable locking away your ISA funds for a longer term.

What are the ISA transfer rules?

There are rules to ISA transfers that must be followed if you wish to preserve the tax-free benefits. Here, we'll look at what you need to know before starting the process:

  • You can transfer your ISA from one provider to another or another product with the same provider.
  • You can transfer from one type of ISA to another or between ISAs of the same type.
  • You can transfer ISAs at any time, though you may be subject to early termination charges with certain types of ISA.
  • You can transfer money saved or invested in the current tax year, but you must transfer the entire amount, including any interest or other returns on those funds.

A key thing to remember with ISA transfers is that you should not move the money yourself, otherwise the subscription will count towards your ISA allowance again. Instead, you must allow your new ISA provider to carry out the transfer for you.

 

Can I transfer any ISA?

Yes, you can transfer from any ISA. However, not all ISA products accept transfers in. This includes transfers between different types of ISA, though there are specific rules and factors attached to some that you will need to contend with — we'll look at ISA transfers by type later in the guide.

It is worth noting that if you have a Notice or Fixed-term ISA account, this may impact when and how you need to transfer:

  • Notice accounts require you to give a stipulated amount of notice if you want to transfer your money. If notice isn't given, you will be penalised before the cash is moved.
  • Fixed-term accounts have a fixed-term agreement — usually with a favourable rate — that means you can't touch your money within the agreed term without being penalised.

If you have either of these ISAs that may incur penalties, it's worth finding out how much you'll be charged, as this may outweigh any benefits of transferring.

 

Can I transfer previous years' ISAs?

Yes, you can transfer money saved in previous tax years without impacting your current annual ISA allowance. You have the freedom to move all, or just a portion, of the funds in an old ISA, unlike money from the current year, which must be transferred in full.

 

How many ISAs can I transfer in one year?

You can make as many ISA transfers as you like in a single tax year, provided you stay within the ISA transfer rules.

Many people get confused when it comes to the 'one pay in' rule and ISA transfers, which dictates that you can only subscribe new funds to one of each type of ISA annually.

You can transfer funds subscribed in past years to a new account and open and pay into another new account of the same type simultaneously, as HMRC doesn't consider the transfer of old funds as 'paying in'. However, you can't subscribe any new funds to the account with past years' cash in, only the one you have subscribed to this year.

For example, if you had £5,000 in ISA A that you'd saved into in past years, you could choose to transfer £3,000 of that cash to a brand new ISA B, while also paying into another new ISA C with funds from this year's allowance. The £3,000 transfer would not count towards the allowance. However, later in the same tax year, you would not be able to add new funds from your current allowance to ISA B, as you've already subscribed to ISA C (‘one pay in’ rule).

If you want to transfer funds from an ISA you've already subscribed to this year, you must transfer the full amount you've saved or invested in the current year across to the new account. Should you wish to subscribe more of your allowance to the same type of ISA later, you must add to the new account you transferred to. Paying into yet another new ISA would break the 'one pay in' rule.

For example, if you open a brand-new Cash ISA A and subscribe £8,000 but then see Cash ISA B that offers a better rate in the same tax year, you can still transfer. However, you must transfer the full £8,000 (plus any interest earned on that money). If you decide to subscribe more of your allowance, you must add it to ISA B and not another new ISA so you're only paying into one Cash ISA.

 

Can I transfer an ISA to someone else?

No, you can't directly transfer an ISA to someone else. If you wanted to move funds from your ISA to one in a different name, you'd need to withdraw your money or sell your investment then give the funds to the other person. They would then be able to add the money to their own ISA, provided the amount fell within their own annual ISA allowance. The funds you originally subscribed would still count towards your own ISA allowance after withdrawal.

 

Are ISAs transferable on death?

Yes, your ISA will be transferred should the worst happen. Your ISA will be moved to your spouse or civil partner on death while maintaining your fund's tax-free status — they will receive the funds and also be granted a temporary extended allowance that expands to accommodate their annual allowance plus the amount transferred from your ISA. This lasts until the end of the tax year, then reverts back to a new personal allowance in line with the current limit. 

In cases where a partner is not the beneficiary of the ISA, your money will be added to your estate along with your other savings and investments. If your estate is worth over £325,000, Inheritance Tax will need to be paid to HMRC at a rate of 40%.

 

How long does it take to transfer an ISA?

Generally, transferring between Cash ISAs should take no longer than 15 working days, with other types of ISA potentially taking up to 30 working days.

 

Are there fees for transferring an ISA?

Whether or not you pay fees for transferring your ISA will usually be subject to the terms and conditions of the provider (usually a bank, building society or investment platform). It may also depend on your ISA product, especially if it’s a Fixed-term or Notice account that will charge a penalty if you access your funds early or without notifying in advance.

Bear in mind, you may also be liable to pay a fee to the new ISA manager and/or the outgoing provider. This is most common with Stocks and Shares ISAs, where you may also be charged when closing your account or selling up shares and funds. Such fees need to be factored in when shopping around for better returns.

 

How do I transfer an ISA?

The transfer process for most ISAs is relatively straightforward, usually just requiring you to open the new account and request the transfer from your new provider, who will do the rest.

Typically, the standard ISA transfer process follows these four steps:

  1. Find another ISA that you want to move your money to.
  2. Get in touch with the provider.
  3. Fill in an ISA transfer form and return it — either online or through the post — to commence the transfer. It will usually have a section that asks you what funds you want to move over to your new ISA.
  4. Your new provider will then handle the transfer of funds within 15–30 days depending on the types of ISA you're transferring from and to.

Finding an ISA to transfer into

Before you start thinking about transferring your ISA, you need to make sure you've researched the market to find one that's right for you. There are a few things to consider when narrowing down the search — be sure to ask yourself the following questions before opening a new account.

  • Does it offer a better interest rate? This is usually one of the primary reasons for switching ISA, so be sure that you're looking at accounts that offer a better potential or fixed rate to your current one. Read our guide to getting the best ISA rates to find out more.
  • What is the level of risk? Does the type of ISA you’re considering match the level of risk you wish to take? Are you looking at riskier Stocks and Shares ISAs when you should be thinking about zero-risk Cash ISAs, and vice versa?
  • Will you be able to access your money? If you may need to access your money in the short-term, be sure to look for accounts that allow penalty-free access. Should you not require access, feel free to look at ISAs that need you to lock away your funds — this will typically qualify you for a better rate.
  • Does it accept ISA transfers in? Before you open your new account, make sure that it does accept ISA transfers in, as you won't be able to move your cash if not.
  • Does it have a limit on ISA transfers in? If it does accept transfers in, find out if there's any limit, as this may prevent you from moving the intended amount.
  • Is it a Notice account? If your cash is locked up in a Notice account, you will need to give notice — sometimes months in advance — of any withdrawals or transfers, which is worth considering when opening a new ISA.
  • Is it a Flexible ISA? Some Flexible ISAs allow you to withdraw cash and replace it in the same year without impacting your annual ISA allowance. This can be a handy advantage if you regularly need to access your money.

Cash ISA transfers

If you have a Cash ISA you wish to transfer, you'll find that it's generally the easiest and quickest to move of all the types of ISA.

I want to transfer a Cash ISA to...What you need to know:
Another provider
  • Standard ISA transfer process
  • ISA transfer can take 15 days
  • No additional rules other than ISA allowance and ISA transfer rules
Help to Buy ISA
  • Must have an existing account, as applications are no longer accepted
  • Standard ISA transfer process
  • ISA transfer can take 15 days
  • Can only transfer in £200 per month, which may mean it is not possible to transfer current-year Cash ISA funds, which must be transferred in full
Stocks & Shares ISA
  • Need to choose what fund or assets to invest your money in
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • A fee may be applied each time you transfer into a Stocks and Shares ISA
Innovative Finance ISA (IFISA)
  • Need to choose a P2P lending platform if you don't already have an IFISA
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Lifetime ISA (LISA)
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • Can only transfer/subscribe £4,000 each tax year
  • If you transfer in funds subscribed in current tax year, you must move the full amount, but if this goes over your available LISA limit, you won't be able to transfer in until the next year

How do I transfer a Cash ISA to another provider?

Should you wish to move your Cash ISA to another Cash ISA with a different provider, things are very straightforward — all you need to do is follow the regular ISA transfer process we've outlined above. Your transfer between providers should take no longer than 15 working days.

In the event that you have any problems, or your transfer takes longer than 15 days, you should get in touch with your new ISA provider. If you're still unhappy with the matter, you can contact the Financial Ombudsman Service to complain.

It's worth mentioning that you should also be able to transfer to a different Cash ISA product with the same provider. Get in touch with your provider if you wish to do this.

 

How do I transfer a Cash ISA to a Help to Buy ISA?

You can transfer funds from a Cash ISA to an existing Help to Buy ISA (applications for new Help to Buy ISA accounts closed on 30 November 2019). However, you will not be able to transfer more than £200 per month due to the Help to Buy subscription limit.

If your Cash ISA funds were subscribed in previous tax years, you have the option to transfer up to £200 per month to your Help to Buy ISA. You could also leave any remaining money in the Cash ISA, transfer it to another account, or withdraw it.

If your Cash ISA funds were subscribed this year, you can only move them to a Help to Buy ISA if you transfer the balance all at once and in full. This is because the Help to Buy ISA is a type of Cash ISA, and so you cannot simultaneously hold current-year funds in both. This means that it may have to wait until the next tax year to transfer if you have more than £200 in your Cash ISA.

We would recommend speaking to your ISA provider(s) for more details about transferring between accounts.

 

How do I transfer a Cash ISA to a Stocks and Shares ISA?

If you are looking for better growth and are willing to take on a higher level of risk, you may wish to transfer from a Cash ISA to a Stocks and Shares ISA. 

Choosing a Stocks and Shares ISA will involve the more complex decision of where to invest your money (you may need to take financial advice) before choosing the right investment platform (sometimes known as a 'fund supermarket'), bank, or building society to shelter your investments. 

Thankfully, your ISA transfer itself follows the regular process and can take up to 30 days to go through. It's worth mentioning that, while there isn't a limit on the number of transfers you make to a Stocks and Shares ISA, each time you do so your provider may apply a fee. Therefore, it can make sense to plan ahead and consolidate the number of transfers you make to save money.

 

How do I transfer a Cash ISA to an Innovative Finance ISA?

By transferring your Cash ISA to an Innovative Finance ISA (IFISA), you can invest in peer-to-peer lending to access potentially better rates of return. They're the ideal middle ground for those looking to take on some risk in exchange for better growth — take a look at our guide to risk and IFISAs to find out more about how safe these accounts are and how they’re regulated.

The good news is that transfers from Cash ISAs into IFISAs are simple and follow the standard ISA transfer process we've mentioned previously. They are subject to the usual ISA transfer rules and there is no specific limit attached to this type of transfer apart from your annual ISA allowance.

You'll find that Innovative Finance ISAs are provided by a peer-to-peer lending platform, which will help you to place your money on loan so you can earn tax-free returns straight into your IFISA. Choosing the right provider is key if you're entering P2P lending for the first time, as you'll need to select a platform with a good record and reputation, as well as one that promises good returns.

Here at Lending Works, our customers enjoy the best of both worlds. Lending Works IFISA investors saw an expected annual return of up to 4.8% in 2018, while benefitting from the protection provided by our Lending Works Shield, which consists of a contingency fund that covers missed payments or defaults from borrowers.

 

How do I transfer a Cash ISA to a Lifetime ISA?

Looking to save securely for the future with an added bonus from the Government? Then it might be a good idea to consider transferring your Cash ISA to a Lifetime ISA. 

The process is simple and can be completed by following the standard ISA transfer process we have previously described. You can save up to £4,000 per year in a LISA, including transfers in from other ISAs, and you will get a 25% bonus up to £1,000. 

While transfers from other ISAs will count towards your Lifetime ISA limit, they won't count towards your annual ISA allowance again. You should also be aware that if you transfer in funds subscribed in the current tax year, you must move the full amount, so if this goes over your available LISA limit, you won't be able to transfer in until the next year. You can choose to transfer any amount from past tax years as long as they don't exceed your LISA limit of £4,000.

Additionally, remember that any cash you transfer can only be withdrawn without penalty if you are buying your first home, are aged 60+, or are diagnosed with a terminal illness. Taking your money out early will result in a 25% charge to your full balance.

 

Stocks and Shares ISA transfers

I want to transfer a Stocks and Shares ISA to...What you need to know:
Another provider
  • Need to decide between an 'in specie' transfer (keep investments) or a cash transfer (sell investments)
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Cash ISA
  • Need to sell investments and transfer in cash
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Help to Buy ISA
  • Need to sell investments and transfer in cash
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • Can only transfer in £200 per month, which may mean it is not possible to transfer current year Stocks and Shares ISA funds, which must be transferred in cash
Innovative Finance ISA (IFISA)
  • Need to sell investments and transfer in cash
  • Need to choose a P2P lending platform if you don't already have an IFISA
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Lifetime ISA (LISA)
  • Need to sell investments and transfer in cash
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • Can only transfer/subscribe £4,000 each tax year
  • If you transfer in funds subscribed in current tax year, you must move the full amount, but if this goes over your available LISA limit, you won't be able to transfer in until the next year

Unlike Cash ISA transfers, Stocks and Shares ISA transfers can be a little more complex owing to the fact that your money will be tied up in investments, rather than available in cash. 

As a result, there are two main forms of Stocks and Shares ISA transfer: 'in specie' transfers and cash transfers, which are quite different from one another:

  • 'In specie' transfers: With this type of transfer (sometimes known as re-registration) the interests you hold within your Stocks and Shares ISA remain invested and they are simply moved to another provider's ISA as they are. This is ideal if you're happy with the assets you currently have, though they typically take longer (4–6 weeks) and exit fees may be payable. Your new provider must also be willing to hold them. 
  • Cash transfers: A cash transfer will see all the investments in your Stocks and Shares ISA sold and the proceeds moved to your new provider to be reinvested or held as cash. These transactions are generally quicker. The tax-free status of your funds remains in place throughout the process, though your money will be out of the market and you may miss out on gains during the transfer.

 

How do I transfer a Stocks and Shares ISA to another provider?

If you're unhappy with the returns from your current Stocks and Shares ISA, you'll be happy to know it's possible to transfer your account across providers to get the best deal. 

Before you can transfer, you'll need to do some research and find a new Stocks and Shares ISA that suits you — be sure to check that it accepts transfers in. 

Next, you'll need to decide whether you wish to undergo an 'in specie' or go with a cash transfer. If you're happy with your portfolio and don't want to miss out on the market, an 'in specie' transfer will suit you. Alternatively, if you want to start afresh with your investments and don't mind being out of the market for a short period, a cash transfer can be a better choice. Cash transfers generally don't have a transfer charge, but missing out on market movement might end up costing you more overall.

Once you've settled on a new Stocks and Shares ISA provider and decided how you want to transfer your investments, the rest follows the standard ISA transfer process. 

 

How do I transfer a Stocks and Shares ISA to a Cash ISA?

By transferring from a Stocks and Shares ISA to a Cash ISA, you can move money you have invested into a secure cash account, which is ideal if you want to reduce the level of risk. 

You can make a direct transfer between these two types of ISA without losing the tax-free status of your funds and there is no limit on how many times you can do so. This transfer works in much the same way as the regular ISA transfer process, where you'll need to choose a new provider and fill in a form. The difference here is that for your investments to become cash, they will need to be sold by your provider so a cash transfer can take place.

The length of time the transfer will take can vary depending on your investments, as some can take longer to sell than others, but it should be completed within 30 days.

If you don't want to transfer your whole Stocks and Shares ISA, keeping some money invested, you may find that the transfer form doesn't include an option for this. Should this be the case, you will need to either include additional instruction with your form for your new Cash ISA provider or get in touch with your Stocks and Shares ISA provider to explain your intentions.

 

Can I transfer a Stocks and Shares ISA to other types of ISA?

Yes, you can transfer your Stocks and Shares ISA across to all the other types of ISA. However, you can only transfer cash from one ISA category to another,  so all investments will need to be converted into cash before the transfer can proceed.

Importantly, your funds will retain their tax-free ISA status after the transfer is completed, provided you follow the correct procedure and do not withdraw from your ISA during the switch. Your transfer will typically take 30 days or less.

If you're looking to reduce the level of risk associated with having your money invested in the stock market but don't want to take a zero-risk, low-growth option like a Cash ISA, you may wish to think about a middle ground, such as an Innovative Finance ISA. 

For instance, Lending Works IFISA investors saw an expected annual return of up to 4.8% in 2018 while having their investment protected by a thorough underwriting process for loans and the market-leading Lending Works Shield. Our customers are able to experience low-risk growth that helps to grow their wealth in the long-term.

 

Help to Buy ISA transfers

Please note: The deadline for opening a Help to Buy ISA was 30 November 2019 and they are no longer available to be opened by first-time buyers. If you already opened one, you can continue to pay in, withdraw, and transfer in and out of the account.

I want to transfer a Help to Buy ISA to...What you need to know:
Another provider
  • Standard ISA transfer process
  • ISA transfer can take 15 days
  • No additional rules other than ISA allowance and ISA transfer rules
  • Ensure old Help to Buy ISA account is closed once you've transferred
Cash ISA
  • Standard ISA transfer process
  • ISA transfer can take 15 days
  • No additional rules other than ISA allowance and ISA transfer rules
Stocks & Shares ISA
  • Need to choose what fund or assets to invest your money in
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • A fee may be applied each time you transfer into a Stocks and Shares ISA
Innovative Finance ISA (IFISA)
  • Need to choose a P2P lending platform if you don't already have an IFISA
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Lifetime ISA (LISA)
  • Standard ISA transfer process
  • ISA transfer can take 30 days
  • Can only transfer/subscribe £4,000 each tax year

Can I transfer money from a Help to Buy ISA?

Help to Buy (H2B) ISAs are designed to help first-time buyers save up a deposit for their first home, with a 25% boost to savings paid in. 

You can transfer money from your Help to Buy ISA to any other type of ISA by following the standard ISA transfer process. However, while you can move as much as you like within the ISA transfer rules and your annual ISA allowance, remember that any money that you transfer out of your account will lose its Government bonus, though it will maintain its tax-free status as long as you transfer to another ISA.

In addition, you can transfer your Help to Buy ISA across to another provider if you feel like you can benefit from better rates elsewhere — you can do this using the regular transfer process. If you do this, take care that your old H2B account is closed as you can only have one of these at any time.

 

How do I transfer a Help to Buy ISA to a Lifetime ISA?

Help to Buy ISAs and Lifetime ISAs are both designed to help first time buyers purchase their first home. If you have both and want to consolidate, or you just want to open a LISA in place of your H2B, it's possible to transfer your money over using the standard ISA transfer process.

While you will lose your 25% bonus on any money taken out of your H2B, you will gain another 25% bonus when you transfer into a LISA to even things out. It's also important to keep in mind that there is an annual LISA allowance of £4,000, so if you want to transfer more than this from your H2B, you'll need to wait until the next tax year to do so.

 

Innovative Finance ISA transfers 

I want to transfer an Innovative Finance ISA (IFISA) to...What you need to know:
Another provider
  • Standard ISA transfer process
  • Funds on loan will need to be sold to other lenders, usually for a small fee
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Cash ISA
  • Standard ISA transfer process
  • Funds on loan will need to be sold to other lenders, usually for a small fee
  • ISA transfer can take 30 days
  • No additional rules other than ISA allowance and ISA transfer rules
Help to Buy ISA
  • Standard ISA transfer process
  • Funds on loan will need to be sold to other lenders, usually for a small fee
  • ISA transfer can take 30 days
  • Can only transfer in £200 per month, which may mean it is not possible to transfer current year IFISA funds, which must be transferred in full
Stocks and Shares ISA
  • Standard ISA transfer process
  • Funds on loan will need to be sold to other lenders, usually for a small fee
  • Need to choose which fund or assets to invest your money in
  • ISA transfer can take 30 days
  • A fee may be applied each time you transfer into your ISA
Lifetime ISA (LISA)
  • Standard ISA transfer process
  • Funds on loan will need to be sold to other lenders, usually for a small fee
  • ISA transfer can take 30 days
  • Can only transfer/subscribe £4,000 each tax year
  • If you transfer in funds subscribed in current tax year, you must move the full amount, but if this goes over your available LISA limit, you won't be able to transfer in until the next year

Peer-to-peer (P2P) lending is an alternative investment option that is growing in popularity all the time. And, with an Innovative Finance ISA, it's possible to shelter your P2P earnings from tax. However, there may come a time when you want to redistribute your money across your ISA portfolio, or switch to another provider, which means you'll need to transfer out of your account.

You'll be glad to know there aren't any complex rules for transferring from an Innovative Finance ISA beyond following the ISA transfer rules and your annual ISA allowance. However, things can get a little more complicated if you wish to transfer funds that are still on loan, as your P2P platform will need to find replacement lenders to take on your loans first. As a result, there is typically a slightly longer wait time for your transfer as well as an admin fee payable.

At Lending Works, we offer a Quick Withdraw option to our customers, which does the hard work of selling loan chunks to other available lenders. If there are a sufficient number of lenders in the queue, the sales should be very quick, though this can vary depending on demand. Customers investing in our Lending Works IFISA through our Flexible product can do this free of charge, while those on our Growth product can withdraw by paying a nominal 0.5% transaction fee, in addition to a charge if the rates on the loans you’re selling are lower than current rates for investors. 

Please note: If you already have peer-to-peer loans with a platform, unfortunately, there is not a mechanism for where you can transfer your pre-existing loans with a provider into an IFISA with the same provider. This is currently an industry-wide ruling, which means that, should you wish to open an IFISA, you must sell your loans and open one with the cash proceeds.

 

How do I transfer an IFISA to another provider?

If you feel like you aren't getting the best returns possible on your P2P loans or your IFISA doesn't offer the benefits you need, you may wish to switch from your Innovative Finance ISA provider to another. 

You can transfer an Innovative Finance ISA to another provider by finding your desired new provider then following the standard ISA transfer process, unless you are moving funds that are on loan where you will also need to follow the platform's process for selling them. This type of transfer won't count towards your annual ISA allowance and should be completed within 30 days.

If you currently have money invested in P2P loans, you may be tempted to think they can simply be transferred to another provider like a Stocks and Shares ISA, but this isn't the case. The money you've invested has been loaned to customers of the P2P platform, so they aren't portable. Instead, you'll need to inform the platform of your intentions so they can sell your loans to other lenders, but you should be able to make a cash transfer at the end.

 

How do I transfer an IFISA to a Cash ISA?

You can transfer money from an Innovative Finance ISA to a Cash ISA fairly simply by following the standard ISA transfer process, unless you are moving funds currently on loan, as you will also need to follow your platform's process for selling them. Once you've submitted the transfer form, it should take no more than 30 days. There may be slightly longer to wait and a small fee if you need to transfer funds that are on loan. Your transfer will not count towards your annual ISA allowance.

 

How do I transfer an IFISA to a Stocks and Shares ISA?

If you want to transfer funds from an Innovative Finance ISA to a Stocks and Shares ISA, you can do so by sticking to the regular transfer process, though if you have funds on loan you want to move, you'll need to sell these through your IFISA provider. Your transfer will not count towards your annual ISA allowance. Make sure you've selected an investment option that suits your needs — don't forget to seek financial advice if you're not sure where to put your cash.

 

Lifetime ISA transfers

A Lifetime ISA is a type of account that is designed for long-term saving or investment, which comes with a 25% contributions bonus from the Government. However, withdrawal is subject to a 25% fee unless you are buying your first home, are aged over 60, or have been diagnosed with a terminal illness. So, if you don't meet these criteria, it doesn't make a lot of financial sense to plan transfers from your Lifetime ISA to other types of ISA.

Please note: These limitations don't affect incoming transfers to your Lifetime ISA and you'll still receive a 25% bonus for them as long as they're under the £4,000 investment annual limit. 

 

How do I transfer a Lifetime ISA to another provider?

While it's inadvisable to transfer your Lifetime ISA to other types of ISA, it's a good idea to transfer your cash or investments to another LISA product if it offers better returns or benefits. However, not all Lifetime ISA providers allow for this option, so it's something that you should check before opening an account.

You can transfer your Lifetime ISA to another provider by finding a provider who accepts transfers then following the standard ISA transfer process. This type of transfer won't count towards your annual LISA limit of £4,000 or your annual ISA allowance again and should be completed within 30 days. Lastly, remember that you can only have one Lifetime ISA at a time, so you need to make sure your old LISA is closed after the transfer.

 

Can I transfer a pension into a Lifetime ISA?

No, there isn't a way you can directly transfer your pension into a Lifetime ISA. Furthermore, it's very difficult to take your money out of a pension and reinvest it in a LISA. 

To move your cash over, you would need to withdraw a lump sum, which you can do once you turn 55. However, you aren't able to save or invest into a Lifetime ISA beyond the age of 50, making it impossible to follow this course of action. The only times you can access your pension earlier is if you have a terminal illness or you have a protected retirement date written into your fund. Some firms offer a "pension unlocking" service, but they are often unreliable and, even if they were successful, you could end up being heavily taxed by HMRC.

It's important to remember that it's possible to have both a pension and Lifetime ISA at the same time and that many people find this beneficial. We recommend that you research both pensions and ISAs before making a decision — seeking financial advice can be useful, too. You can also read more about using an ISA to save for retirement in our guide to ISAs.

 

Junior ISA transfers

A Junior ISA (JISA) differs from the other types of ISA as it technically belongs to your child and is not held in your name. They have their own contributions limit (£4,368 a year for 2019/20), which is separate from the annual ISA allowance. As a result, even though you might open and manage the account, your options for transferring JISA funds are more limited than with your own ISAs.

Please note: You cannot transfer funds from a Junior ISA to an adult ISA of any type.

For JISAs, there are a few transfer options available:

  • Transfer your child's Junior ISA to another provider
  • Transfer between your child's Junior Cash ISA and Junior Stocks and Shares ISA
  • Transfer a Child Trust Fund to a Junior ISA

There are also a few rules that govern JISA transfers:

  • There are Junior Cash ISAs and Stocks and Shares ISAs, and your child can only hold one of each type at any one time.
  • Transfers between Junior Cash ISAs can take up to 15 days, while those involving Junior Stocks and Shares ISAs can take up to 30 days.
  • Any transfers of funds subscribed in the current year or transfers between JISAs of the same type must be done in full.
  • You can only carry out a partial transfer if the funds were subscribed in a previous year and you're moving them from a Junior Cash ISA to a Junior Stocks and Shares ISA, or vice versa.
  • Like adult ISAs, JISA transfers won't count towards the annual JISA allowance.

 

How do I transfer a Junior ISA to another provider?

One of the ways you can transfer a Junior ISA is to another provider, which enables you to get the best rates and benefits for your child's savings. 

As your child can only have one Junior Cash and Stocks and Share ISA at once, you'll need to transfer the full balance and close the previous account if you're making a like-for-like switch. If you want to move both types of ISA across, you can make a partial balance transfer between Junior Cash and Stocks and Shares ISAs, but only with funds subscribed in previous tax years. 

You can arrange to transfer between Junior ISA providers by following the standard ISA transfer process and will need to be ratified by the 'registered contact' responsible for managing the account. It's also worth making sure that any new provider accepts transfers in, as some may not.

 

How do I transfer Junior Cash ISA to Junior Stocks and Shares ISA?

You can transfer between a Junior Cash ISA and a Junior Stocks and Shares ISA by following the standard ISA transfer process. If you're moving funds added in the current tax year, you must transfer the whole amount, while money subscribed in previous years can be transferred in amounts of your choosing. 

Should you be transferring a Junior Cash ISA to a brand-new Junior Stocks and Shares ISA, you will need to put some thought into how and where you want your child's money invested. Remember that funds being moved from Stocks and Shares accounts require investments to be sold, which can take a little longer than a Cash to Cash transfer.

 

How do I transfer a Child Trust Fund to a Junior ISA?

If your child still has a Child Trust Fund (CTF), then you may want to transfer it to a Junior ISA. CTFs were introduced as a tax-free savings account for children born between 1 September 2002 and 2 January 2011 but have since been replaced by Junior ISAs. Many people are making the switch due to the better interest rates offered by JISA providers.

Please note: The Government set up a CTF for every child born between these dates with £250 added to every account. This means that your child may have one and you may not have realised — if you think this may be the case, visit HMRC's advice page for guidance on how to find it.

You can transfer a Child Trust Fund to a Junior ISA by following the regular process for ISA transfers, though there are a couple of things to bear in mind:

  • Any transfers from CTF to JISA must move the entire balance of the CTF over and the Fund must be closed afterwards.
  • If your child has multiple CTFs, you'll need to contact each provider and arrange a transfer to your desired JISA provider.
  • Your transfer will take up to 15 days if transferring into a Junior Cash ISA and up to 30 days if you are moving to a Junior Stocks and Shares ISA.

 

ISA transfers at Lending Works

You are free to move any existing ISAs to a Lending Works IFISA, and you don’t have to wait until the end of the current tax year to do so. 

Transfers to your Lending Works IFISA are subject to the same ISA transfer rules as other types of ISA, so any funds subscribed this year need to be moved in full, while past years' subscriptions can be added without restriction.

 

How can I transfer my existing ISA to Lending Works?

Whether you are transferring ISA subscriptions from current or previous tax years, you will need to follow the standard ISA transfer process — this is also set out in your Lending Works account. 

The process will involve completing and authorising a transfer request form. We then get in touch with your existing ISA provider directly and aim to complete the transfer for you within 30 days.

Remember, you must not make this transfer yourself by withdrawing the funds and sending these to Lending Works. This could result in withdrawal of your funds from your ISA and loss of ISA tax benefits on those funds. If you are unsure, please contact us before you take any action.

 

Can I transfer my Lending Works ISA to another ISA provider?

Yes, you can, provided the funds in your Lending Works IFISA you wish to transfer are held in cash i.e. not on loan or allocated to a loan. If they are, you will either need to wait until funds are repaid on your loans or use the Quick Withdraw facility to access your funds early. Your transfer will be subject to the same ISA transfer rules as all other transfers.

 

How can I transfer my Lending Works IFISA to another ISA provider?

Whether you are transferring ISA subscriptions from the current or previous years, you will need to follow the transfer process provided to you by your new ISA provider (to whom you wish to make the transfer). This will involve completing and authorising a transfer request form. Your new ISA provider will then get in touch with us to complete the transfer for you within 30 days.

Again, do not withdraw funds and send them to a new provider as you could end up losing the tax-free benefits of your ISA. 

 

Will I be charged for transferring ISA balances in or out?

No. We won't charge you for transferring your Lending Works IFISA to another provider, though you may be subject to a charge for using our Quick Withdraw function to take out funds on loan. We also won't charge you for receiving a transfer from any existing ISA. However, your new or existing ISA provider may apply administration charges for the transfer, such as for supplying information.

Unfortunately, we're unable to refund any charges made by your new or existing ISA provider, or refund any interest and/or bonus you may lose by transferring. Please check any charges or penalties with your new or existing ISA provider before requesting any transfer of funds.

Are there any restrictions on how much I can transfer from existing ISAs?

As set out above, any funds subscribed in the current tax year must be transferred in full (including any interest). Any funds subscribed in previous tax years can be transferred in any amount or any number of transactions.

 

How many transfers can I make each year?

In a tax year, you can transfer in or transfer out any number of previous tax years' subscriptions. For current tax years' subscriptions, there isn't a limit either, but you must transfer the full amount each time.

 

What if I transfer funds to you on the last day of the tax year?

If you transfer funds to us on the last day of the tax year (5 April), provided these funds are cleared in our client bank account by the end of the day, these will count as a transfer within the current tax year, even if these are not immediately allocated to your Lending Works IFISA. If you miss the deadline, they will count towards your next tax year's allowance.

Please note: If you transfer funds on a non-business day, they may not clear in our client bank account until the next available business day.

If, in the unlikely scenario, you send us funds before you have opened a Lending Works IFISA with us (though you should never do this), your funds will not be treated as received by us into your ISA until your account has been opened.  

If you are opening a Lending Works IFISA and/or transferring in funds towards the end of the tax year, we suggest you give yourself sufficient time to avoid losing any remaining annual ISA limit. You should avoid leaving subscriptions to the last day of the financial year where at all possible.

 

Can I move my existing loans into my Lending Works IFISA?

No, unfortunately it is not possible to move existing peer-to-peer lending loans into your IFISA. This is an industry-wide ruling, and Lending Works’ hands are essentially tied. However, you can use the Quick Withdraw facility to sell your rights under the loan agreement to one or more other lenders, then move the proceeds of sale from your Classic Account to your Lending Works IFISA.

Please note: Early access to your funds is not guaranteed and relies on there being lenders available to purchase your loan chunks.

 

It is important that we highlight that with investments, your capital is at risk.

Now that you're up to date with how much you can invest in your ISAs and what you can open in the current tax year, it may be worth considering a Lending Works Innovative Finance ISA for your portfolio. Got any questions? Take a look around our help centre or get in touch. 

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