How to transfer a stocks and shares ISA

Saving for retirement with ISAs 

ISAs or ‘Individual Savings Accounts’ let you save up for anything you like, but lots of people use them to save for their retirement. They work because, unlike an ordinary savings account, you don’t pay tax on any growth on your investment. Brilliant.

There are two main kinds of ISAs for adults – Cash ISAs and Stocks and shares ISAs.

The following video is about Tomorrow Starts Today and has a transcript (see below).

How to transfer Stocks and shares ISAs

cash symbol going between two piggy banks

Transferring a Stocks and shares ISA is relatively simple. Most ISA providers can do it online for you – all you need is the details of your existing accounts.

There’s one important thing to watch out for: Make sure you contact your new ISA provider to arrange the transfer, rather than withdrawing money and moving it yourself. They’ll transfer it for you in the correct way and make sure you don’t lose out on any annual allowance.

Don’t worry if that sounds complicated – just check with your new provider that you’re transferring, rather than withdrawing, your money and you won’t be caught out.

What about Cash ISAs? 

Interest rates have been low for a while. So if you’ve previously saved into a Cash ISA, you might not get a lot of bang for your buck. Transferring savings from a Cash ISA into a Stocks and shares ISA might be something you should consider – although as with all investments, that brings a higher element of risk because when you invest in the stock market you may not get back as much as you put in.

More than one ISA?  

Everyone in the UK has an annual ISA allowance. The ISA allowance is the maximum amount that you can invest each year into ISAs. Currently, you can save up to £15,240 each tax year into a cash ISA or a stocks and shares ISA, or split your allowance between them both, but you can only pay into one stocks and shares and normally one cash ISA in a tax year. There are some occasions where there are additional allowances available.

2 stacks of coins

From 6 April 2016 new rules mean that some ISA providers will let you take money out, then put it back in again without it using up some of your annual ISA allowance.

Your allowance re-sets every tax year though. That means you can continue paying into your current ISA with a fresh allowance amount or you’re free to start a new Stocks and shares or Cash ISA every year, to take advantage of each year’s new tax-free allowance. So it’s possible to collect a few ISAs, as time goes by. 

There’s a downside to that though. Having a few ISAs can get a bit complicated. It’s harder to keep track of your money. And if you’ve invested in a number of Stocks and shares ISAs, you’ll probably be paying fees on each account.So, transferring your Stocks and shares ISAs and consolidating your savings to one account, under one umbrella, might be the right move for you.

Stocks and shares ISA transfer – getting it right for you

The following video is about Investing your money and has a transcript (see below).

There are lots of good reasons to think about transferring your savings to one Stocks and shares ISA: It’s easier to keep track and you could pay less in fees. If you’re investing for the longer term it could be worth considering as you may get a better return on your investment than with a Cash only ISA. But there are risks too. Because a Stocks and shares ISA takes your cash and invests it on the stock market, the value of your cash could go down as well as up. You might not get back as much as you put in. Your current provider may also charge to transfer your cash over. And if you have a lot of savings, it’s a good idea to check up on the deposit protection rules.

Remember, you can always talk to an Independent Financial Advisor if you need advice. Alternatively contact Aegon Assist for guidance on transferring your ISA. And, as always, the golden rule is to do what’s right for you – and for your future.