Transferring Your Cash ISA


ISA rules in the past meant if you wanted to build up a tax-free cash lump sum, you opened a Cash ISA, and if you wanted to invest tax efficiently you opened a ‘stocks and shares’ ISA. Also, as a Cash ISA investor you were entitled to only half the annual ISA allowance of an investment investor.

What’s next for your Cash ISA?

New ISA rules have brought a far greater flexibility to ISA investing, allowing you to invest all of your £20,000 annual allowance towards any combination you like of cash and/or investments.

While today’s low interest rates might make you think the benefits of holding a Cash ISA over a single year are relatively limited, it is the compound effect of multiple years’ worth of contributions, combined with growth, where ISAs come into their own. Being able to potentially convert a six figure ISA, over time, into a tax free income stream, when you need it, is a great option.

Where recent rule changes become even more interesting, is in the new flexibility to transfer from an investment ISA into a Cash ISA at any point. This may seem trivial, but it is a huge benefit. It means you can now benefit from the potential to grow your ISA by investing in the stock market (see more on investment ideas below), then convert the entire amount into a Cash ISA at any point to provide a tax free, non-declarable cash income stream, or to use as a lump sum. This extends to any ISAs you may hold elsewhere, as you can now transfer cash from previous ISAs into your new ISA.

Benefits of the New ISA

  • Invest up to £20,000 (2017/18 allowance) tax efficiently.
  • By investing with an ISA you’re protected from capital gains tax and you don't pay any additional income tax on returns
  • You can now transfer other Cash ISAs you may hold into your new ISA, giving you the ability to invest the money, while keeping the tax benefits of previous allowances
  • You now have full flexibility on holding cash and transferring to and from a Cash ISA account at any point, as you need it
  • Invest in a wide variety of investments, including those previously excluded such as cash funds and short-term bonds

Why Invest your Cash ISA with us

Our ISA lets you invest in a wide range of investments using our award-winning platform and service:

  • Invest in shares, funds, bonds and more, and hold cash in the same ISA account.
  • Straightforward pricing, plus we don’t nibble away at your investment performance by charging percentage fees
  • £20 quarterly charge, which covers commission charges to the value of £20 of trades
  • £10 flat fee for UK and international shares, frequent trader rate just £5
  • Add a Junior ISA for free

From Cash to Investments and back again

Despite low interest rates, Cash ISAs still have a valuable part to play, especially if you’re a committed saver who doesn't like any investment risk. However, if you’re worried about earning no, or very little, interest, from your cash ISAs, you might be ready to consider investing the money instead.

The new ISA rules now give you even more flexibility on what you can invest in within an ISA. Previously you couldn’t hold investments that appeared to be too close to cash. With the new rules, investments such as short term bonds or cash funds now qualify. ISA investors can now actively self-select whether to invest in very low risk bonds or gilts, which may provide a better return on their money than cash.  

If you’re new to investing we have several ideas for you to think about and research further, to help you get started.

Investment Ideas

We offer some investment options – some of these are more closely aligned to cash investments, which you can research further to see if they are right for you:

Fixed interest fund selections

These are funds which invest primarily in government and corporate bonds, both in the UK and Europe, and which have beaten their benchmark over the last three and five years.

Fixed interest fund selections >

Ready-made fund selections and model portfolios

If you are looking for further options to research, you can view a selection of portfolios designed for growth or income, and other investment selections structured around themes.

Ready-made options>