Transferring ISA

Penguin2301

Hi,

I think i understand but can someone clarify for me.

If I have paid £3000 into an ISA last year with a provider and £1500 this year so far and decide I want to move that ISA to another provider - can I do this, and then put in the final £1500 into the ISA at the new provider? So basically the new provider will accept my £4500? or will they only accept the £1500?

Thanks

Ian

Milarky

Penguin2301 wrote:

Hi,

I think i understand but can someone clarify for me.

If I have paid £3000 into an ISA last year with a provider and £1500 this year so far and decide I want to move that ISA to another provider - can I do this, and then put in the final £1500 into the ISA at the new provider? So basically the new provider will accept my £4500? or will they only accept the £1500?

Thanks

Ian

I believe that is how it is intended to work. You have to move the full £1500 representing the year-to-date subscription - there is no option to split it between your existing and your new provider. Thus your new provider takes charge of the full current year's allowance - including the as-yet-unused portion. On the other hand you can split previous year's subs if you please. Now the practical effect of that is that you could move £3000 to your new provider (and leave £1500) but you can only add new money to your currently-designated provider. If you wanted to end the year with two equal chunks you would just transfer £1500 and top it up to £3000 from this years allowance.

And of course there's the small matter transfers-in always being at the provider's discretion. They can set any rules they like - even the 'stakeholder-compliant' ones. The only thing SH ISAs must to is allow you to transfer-out without penalty. Many ISAs are not SH standard however (they often pay better interest) which allows then to put up exits and take them down at whim (eg Alliance and Leciester)

It is interesting to note that many of the smaller building societies accept transfers-in with few restrictions and these accounts offer the 'better' rates on the lowest balances compared to their other accounts. Whilst NS&I, for instance, offers an otherwise excellent rate (and other offers from others have been very good for a while) they don't accept transfers-in - this account is for new money only. This shows that they don't actually represent such good value. But I suspect they rely on inertia and it not even occuring to customers to ask for a transfer out.