Transferring a Cash ISA to Hargreaves Lansdown Cash ISA

sush40

Hi, 

Has anyone managed to transfer a Cash ISA to the new HL Cash ISA at 4.55%? 

The process doesn't seem to be very straight forward - the cash ISA with your current provider needs to be transferred to a HL Stock and Shares first, then from HL S&S to HL Cash ISA.

I am ready to send my application, however I am wondering if there are any fees for having my money held in a S&S with HL while waiting to be converted to a Cash ISA again.
If I'm correct, I shouldn't be charged anything, since the money stays as cash in the S&S. My provider is Tembo and I don't think they charge anything either for transferring out.   

BreakingGlass

From HL’s Cash ISA Key Features document:
https://www.hl.co.uk/__data/assets/pdf_file/0010/15897916/cash-isa-key-features.pdf

We currently can’t accept transfers of other ISAs into the HL Cash ISA, but you can transfer to another ISA manager.

I had assumed that this would include such an ‘internal’ transfer, but am intrigued by your possible workaround and will follow with interest. 

sush40

Thanks, if you check on their website this is what they recommend to do (transferring to a S&S ISA, then moving from S&S to Cash ISA). I also found this on the document you attached

''Cash can also be transferred from your Active Savings Account cash hub to a savings product in the HL Cash ISA. This will be done on the same working day if instructed before 12 noon, otherwise, it can take up to one working day.''

ColdIron

I guess the cash hub route won't work for transferring an existing cash ISA as it would leave the ISA wrapper

refluxer

The workaround seems to be a legit workaround from HL themselves - this statement in the cash ISA FAQs spells it out a bit more clearly.

morgmonster

I'm most of the way through this and it has been straightforward. I already had a HL login as I have JISAs for my kids which are administered through my account. 
Friday - opened S&S ISA in HL (I opened it with a payment of £100 through a truelayer bank connection but can't remember what the minimum was or even if there was a minimum) and gave details of my Chip account to be transferred
Monday - email from Chip confirming they had received the transfer request
Tuesday - email from Chip confirming transfer had been processed
Thursday - got email saying my HL S&S ISA was open. Opened Cash ISA, then selected the 4.55% ISA, funded it with £1 from a debit card. I can see all my money sitting in Cash part of the S&S ISA, next job is to transfer over (this is the bit I haven't done yet as my boss arrived so I had to get off my phone...)

All been very straightforward so far. Gold stars to Chip and HL. Will update if there are any difficulties but I don't anticipate it...

sush40

yes, that's what they told me as well when I rang. However, I don't know if this will incur fees (having a temporary S&S ISA with them). I believe it's free, as long as the cash is not converted to funds? 

morgmonster

sush40 said:

yes, that's what they told me as well when I rang. However, I don't know if this will incur fees (having a temporary S&S ISA with them). I believe it's free, as long as the cash is not converted to funds? 

That is my understanding too. The fees come in when you actually invest in something.

slicendice

sush40 said:

yes, that's what they told me as well when I rang. However, I don't know if this will incur fees (having a temporary S&S ISA with them). I believe it's free, as long as the cash is not converted to funds? 

May be best to direct the question to HL themselves? They would surely have a legal obligation to clarify what charges, if any, would be incurred from going via the S&S ISA?

Also following with interest as I'm looking to transfer my current ISA from T212 as it's dropped to 3.85%.

But I'd also wonder about the risk factor...if you transferred your current ISA to the HL S&S ISA and then, whilst the transfer to the HL Cash ISA was happening (no idea how long that would take?), the markets dipped, you could end up losing a chunk of change. I mean, I know that's always on the cards with any kind of investing, but one of the reasons for holding a cash ISA is that you avoid such risks. 

morgmonster

Top of this page ISA Charges & Fees For The Stocks & Shares ISA | HL

"Your annual charge depends on whether you hold funds or shares in your ISA. There are no charges for opening an account, holding cash or inactivity."

refluxer

slicendice said:

But I'd also wonder about the risk factor...if you transferred your current ISA to the HL S&S ISA and then, whilst the transfer to the HL Cash ISA was happening (no idea how long that would take?), the markets dipped, you could end up losing a chunk of change. I mean, I know that's always on the cards with any kind of investing, but one of the reasons for holding a cash ISA is that you avoid such risks. 

I would guess that the transferred cash would presumably be in the 'uninvested cash' part of the S&S ISA account initially, where it wouldn't be affected by any fluctuations in the stock market. The downside to having money as cash in a S&S ISA is that it usually earns no interest, so you wouldn't want it there for long.

As always though, anyone with any doubt about something so important should get official clarification, just as you mentioned.