Stocks and shares Isas explained Stocks and shares Isa transfers
Unlike cash Isa transfers, stocks and shares Isa transfers aren't just about chasing a better return.
There are many reasons why you might choose to transfer your account from one provider to another, while not necessarily making changes to the underlying investments:
- You might calculate that you'd be better off with a new provider offering lower fees or dealing commissions
- You might seek out a provider offering wider investment choice
- You might be unhappy with your existing provider and value better online facilities or customer service
Crucially, transfers do not count as new contributions for the current tax year so you can move money invested in previous tax years in addition to making new Isa contributions.
Find out more: Fund supermarkets reviewed – read our unique ratings for stocks and shares Isa providers
There are two ways you can transfer your stocks and shares Isa from one provider to another. You can carry out an 'in specie' transfer or a cash transfer. Here we will explain how each option works, and outline the pros and cons of each approach.
'In specie' transfers
This is the industry jargon term for a stock transfer and is also sometimes called 're-registration'. It means that all the investments you hold in your stocks and shares Isa are transported to your new provider – you stay invested throughout the process.
If you're happy with your investments, this type of transfer makes sense, although it is likely to take longer, typically four to six weeks, and you might have to pay exit fees to your existing provider.
Find out more: Step-by-step guide to stocks and shares Isa transfers – ensure your transfer occurs efficiently
With this type of transfer, your investments are sold, and the proceeds passed to your new provider. The Isa status of your cash remains in place throughout the process – your new provider will just reinvest your money in line with your instructions.
Cash transfers are typically quicker, but your money will be out of the market, meaning if shares go up you could miss out on some of the gains. Nevertheless, if you intend to use your transfer as an opportunity to give your portfolio a fresh start, transferring as cash is the logical option.
Transferring a cash Isa to a stocks and shares Isa
It is also possible to transfer your cash Isas into a stocks and shares Isa – and with interest rates still flirting with historic lows, this might prove a tempting option for some frustrated savers searching for a better return.
But the security offered by cash savings is not something to give up lightly and transferring should only be contemplated by those happy to accept the risk that they could lose money on the markets.
Transferring a stocks and shares Isa to a cash Isa
From July 2014 it has also been possible to transfer from a stocks and shares Isa to the safety of a cash Isa without losing the Isa status on your money. You can do this as many times as you like.
As with other types of Isa transfer, you will need to contact the cash Isa provider you would like to transfer to and complete its transfer form.
If you would like to complete a partial transfer, selling some investments in order to transfer the proceeds to a cash Isa but leaving others invested, and the transfer form does not give you this option, you will need to either include a covering letter stating your instructions with your transfer form, or contact your stocks and shares Isa provider separately in order to make your intentions clear.
Contacting your stocks and shares Isa providers in more complex scenarios should minimise the possibility of any misunderstanding.
It should also be noted that many stocks and shares Isa providers allow investors to hold cash on a temporary basis within a stocks and shares Isa while they are out of the market. This option should continue but, as before, interest rates will usually be negligible and the option should not be confused with a cash Isa.
- Fund supermarkets – find a new home for your stocks and shares Isa
- Back to basics – check out our beginner's guide to investing
- Which? Money Helpline – our experts can help with any transfer troubles
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