How does an ISA transfer work?

How do you actually transfer an ISA?

You contact the provider you want to move to, not the one you are leaving, and fill out an ISA transfer form. That new provider then requests the money from your old one and moves it directly between the two accounts.

This matters because of one gov.uk warning, stated plainly: if you withdraw the money without doing this, you will not be able to reinvest that part of your tax-free allowance again. The moment cash lands in your current account instead of moving ISA to ISA, the tax wrapper on it is gone, unless the ISA you took it from happens to be a flexible ISA and you put it straight back into that same account in the same tax year. A transfer sidesteps the risk completely, because the money never leaves an ISA wrapper.

Current year money and previous years’ money

Your ISA holdings are really two pots. There is whatever you paid in during the current tax year, which still counts toward this year’s £20,000 allowance if you moved it elsewhere, and there is everything from earlier tax years, which is just yours to move freely. gov.uk is explicit that a transfer “can be to a different type of ISA or the same type” and that “the investment can have been made this year or in previous years.”

The distinction matters for record keeping rather than tax: your new provider needs to know how much of this year’s allowance you have already used, so it can stop you accidentally going over £20,000 once you add fresh money on top of the transferred amount.

Can you transfer only part of your ISA?

Yes, and this is a relatively recent change. Since 6 April 2024, you have been able to transfer part of the current tax year’s subscriptions to a new provider, rather than being forced to move the whole amount in one go. You have also been able to pay into more than one ISA of the same type in a single tax year, for example splitting Cash ISA subscriptions across two providers, as long as the combined total across all your ISAs stays within £20,000.

Two account types work differently. Lifetime ISAs and Junior ISAs have their own transfer restrictions, and an Innovative Finance ISA may let you transfer the cash out while restricting transfers of other investments still held in it. Check with your provider before assuming a partial or split transfer will be accepted.

What if you have a Lifetime ISA or a Junior ISA?

Both come with extra rules on top of the general ones above. You can only pay into one Lifetime ISA in a tax year, so if you are transferring an existing Lifetime ISA and also thinking about opening a new one elsewhere, remember the transfer itself is not a fresh subscription, but timing still matters so you do not end up subscribing to two in the same year by mistake. A Lifetime ISA transfer can move between the cash and Stocks and Shares versions of the product, and between providers, without losing the 25% government bonus already added, provided it is handled as a genuine transfer rather than a withdrawal followed by a new subscription.

A Junior ISA has to stay in the child’s name throughout. A parent or guardian can move it between providers, and between cash and Stocks and Shares Junior ISAs, but the money stays locked until the child turns 18, at which point it becomes an adult ISA automatically. You cannot transfer a Junior ISA into an adult ISA early, and an adult ISA cannot be transferred into a Junior ISA at all.

How long should a transfer take?

If your transfer overruns, first go back to your ISA provider and ask what has happened. If you are unhappy with the response, the Financial Ombudsman Service can look into it. Innovative Finance ISA transfers are a partial exception: gov.uk simply advises asking your provider how long a transfer of those specific investments will take, since it depends on what you hold.

Fixed-rate ISAs and exit penalties

If your cash is in a fixed-rate or fixed-term ISA, moving it before the term ends is usually still allowed, but it can come at a cost. Providers commonly apply an exit penalty calculated as a set number of days of lost interest, sometimes 60, 90 or 180 days’ worth, deducted from your balance when you transfer or withdraw early. Some products do not allow early transfers at all.

This is entirely down to the provider’s own terms, not a government rule, so read the product conditions before you request a transfer partway through a fixed term. Weigh the penalty against what you would gain from moving.

The 2027 change: Stocks and Shares to cash is blocked for under-65s

This sits alongside the new £12,000 Cash ISA limit for under-65s, which also starts on 6 April 2027. Both changes are designed to stop savers moving large Stocks and Shares ISA balances into cash to sidestep the lower cash limit. If you are weighing up whether to move money into a Cash ISA, the position before that date is different from the position after it, so check the date against your own plans.