Changes to ISAs

vikkimcd

Hi. I have £40k in an ISA and the interest rate has dropped recently, so I would like to move it. I believe there are changes coming in April as to how much you can add to an ISA (depending on age), is that correct?

I was wondering if I moved £20k now to a better rate account, and then another £20k before the deadline, would that be allowed? Or would I need to take some out and put it into a stocks & shares ISA?

masonic

Not this April, next. So it is a problem for next year. If your 2025/26 allowance is unused, then it would be advisable to use it if you can before the end fo the tax year regardless.

Woodstok2000

ISA rules change in 2027. But even so, anything within an ISA can be moved to other ISAs regardless of amount.

jimjames

I was wondering if I moved £20k now to a better rate account, and then another £20k before the deadline, would that be allowed? Or would I need to take some out and put it into a stocks & shares ISA

Any changes to ISAs will have no impact on existing money already in ISAs except that you will be unable to transfer money from a S&S ISA to cash ISA unless you are over 65. If you have £40k in an ISA already you can move all of it whenever you want regardless of tax years. The £20k limit is purely for new contributions.

vikkimcd

Okay, I'll deal with that next year. Can I transfer £40k into a new account, or do I need to do it in two chunks (one now and one after April deadline)?

bioboybill

You can transfer the whole £40K, but only if the new ISA provider accepts transfers. Plenty don't, or pay less for transfered money.

vikkimcd

Great, thanks!

vikkimcd

So just to clarify - next year I leave the ISA where it is, or if I move it, it will be split into part cash ISA and part stocks and shares ISA?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81916134#Comment_81916134

There won't be any splitting like that - the proposed new rule restricts how much new money can be deposited into cash ISAs.

Yorkie1

You could have £100K in a cash ISA and in theory transfer the whole lot, whenever you wanted, to another provider (or you could choose to transfer it to a number of providers). Those providers can be cash ISAs or Stocks and shares ISAs.

If you have not already put £20K of NEW money into an ISA (cash and/or S&S) this tax year, then you have until 5 April to do so. In practice, probably best to do it by about 31 March or 1 April, as 2 April is the last working day of the tax year.

Irrespective of how much you put into an ISA this tax year, from 6 April you have another £20K allowance for the tax year 2026-27. Again, you can put all of this into a cash ISA if you want.

Once you get to 6 April 2027, then the 2027-28 tax year has started. From then on, until you reach 65, you still have a £20K overall allowance for new money, but you are limited to £12K for a cash ISA. And anything you invest into a S&S ISA instead cannot then be transferred out into a cash ISA.

vikkimcd

Okay, so I have found a higher rate if I open a new ISA with Trading 212, rather than transferring the £40k to a lower account elsewhere. So am I right in thinking I could withdraw the £40k to my current account, put £20k into the Trading 212 cash ISA now, then the other £20k in after April 6th? If I just do a transfer of the whole lot, the rate is lower.