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This is Money podcast….
I was listening to this weeks “This is Money” podcast and I heard someone say that from April 2027, any money paid into a S&S ISA, won’t ever be transferable to a cash ISA.
Have I heard right, is this correct?
Comments
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Yes that's correct. It's because the amount you can subscribe to a cash ISA will fall to £12k per tax year, so they don't want people simply bypassing that by initially subscribing to a S&S ISA then transferring to cash ISA.
Though "ever" might not be correct. We've yet to see how the exception applied to over 60s will apply in practice.
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I think the exception will be for over 65's.
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Yes, of course, I was confusing with the LISA age threshold.
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I think I need to elaborate on my original post.
I turn 65 in May 2028 so my plan is / was, to transfer anything I have in a S&S ISA, over to a cash ISA.That’s why alarm bells rang when I heard that from April 2027, anything held in a S&S ISA won’t be able to be transferred over to a cash ISA.
I could do with clarification whether this will be the case so I can take action before then.
For anyone who’s interested in listening to what they said, it’s around 41mins and 25 seconds into the podcast.
Thanks to anyone who replies.0 -
Yes I know about the reduction to £12k, but the way they said it suggested that anything in a S&S ISA from April 2027 will not be transferable over to a cash ISA. If you’re interested it’s 41mins 25 seconds into the podcast. Have a listen 🤔👍
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I think that's a very strong indication (at source not Chinese whispers) that the no transfer rule won't apply to those aged 65 or over
I came, I saw, I melted3 -
Everyone naturally wants clarification but, other than the above tax newsletter, which slightly amplified on the budget announcement, there isn't any yet, as the details are still being worked out. Obviously there's still over a year to go until the new rules will apply, and, unlike new contributions, there are (until then) effectively no restrictions on how much can be transferred and between which types, so there's no huge urgency to crystallise a plan at this stage.
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I'm well aware of the changes coming into play in April 2027 and have already stated that what you heard was correct (apart from the "ever"). That's why I explained "It's because the amount you can subscribe to a cash ISA will fall to £12k per tax year, so they don't want people simply bypassing that by initially subscribing to a S&S ISA then transferring to cash ISA".
Have a read of my earlier post.
The main risk to the plan to transfer to a cash ISA once you reach the age of 65 is if providers decide it's easier on them just to decline to accept transfers from S&S ISAs, which is their right. Even in that case, there will likely to be some providers who allow it, and from any of those providers you could transfer to any other accepting a transfer from a cash ISA.
If you want to be safe, then plan to transfer in February 2027 (allowing plenty of time before the rules kick in) instead of May 2028. But you will likely find out more over the course of the next 11 or so months.
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so I wonder if that means that any cash held in S&S ISAs before the age of 65, that this can be transferred into a cash ISA after the age of 65?
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There's nothing to suggest otherwise in that excerpt but the key point is that nobody knows yet.
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