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New Isa rules: completing an Isa transfer

Which? Common Money Problems Solved: March 2015

White piggy bank being emptied of coins onto a grass mound

In this monthly series, we share recent questions about money and the answers provided by our experts on the Which? Money Helpline.

Our experts have taken a number of calls in the last month from people with various queries about the rules regarding cash Isa transfers. 

We’ve heard from Which? members looking to transfer Isa savings built up in previous tax years into new Isas. We’ve also heard from members who are interested to learn more about the new rules regarding transfers from child trust funds to Junior Isas and the transfer of a deceased spouse’s Isa funds.  

Find out more: Call the Which? Money Helpline – your financial queries answered

Transferring Isa funds

Isas were the most popular issue when it comes to savings. 

Most members were interested in how to find the best cash Isa, but we also had a couple of queries about the Isa transfer rules, in particular the rules about partial transfers of previous years’ allowances.

If you are looking to move Isa funds from previous tax years, you should be aware that some providers will not allow partial transfers. 

However, if they do, it’s possible to transfer different amounts to a number of different Isas (fixed, instant-access, stocks and shares etc). When moving funds from the current tax year, you can only transfer the full amount.

Find out more: How to transfer a cash Isa – all you need to know 

New Isa Rules

We have also taken some calls on the changes to Isa rules which will allow husbands and wives to inherit one another’s Isa pots tax-free, and on the change which means that child trust funds will be transferable to Junior Isas.

Deceased spouse Isa transfers

Isa rules change this April, permitting the surviving partner of a spouse or civil partner who dies on or after 3 December 2014 to receive an additional Isa allowance equal to the value of the deceased’s Isa savings at the time of their death. 

Transferring from Child Trust Funds

From April 2015, the government is going to change the rules to allow those children with Child Trust Funds (CTFs) to be able to transfer them to Junior Isas.

This is good news for the millions of parents whose children have money tied up in CTFs, as many pay lower interest rates than their Junior Isa counterparts, and there is less choice.

Currently you can earn 4% tax-free interest on a Junior Isa from Halifax if the parent/guardian holds an existing Halifax cash Isa. Alternatively, Coventry Building Society and Nationwide are both offering Junior Isas paying 3.25%. 

More information about both of these new rules will be announced by the Government closer to their introduction. 

Find out more: Junior Isas explained – how these products work 

Pensioner Bonds

We continue to get calls about the new NS&I pensioner bonds, which launched in January

These bonds pay market-leading rates on one-year and three-year options: 2.8% and 4% respectively. So, if you’re over 65, the NS&I bonds might well be your first port of call ahead of Isas. The application deadline recently extended to 15 May 2015.

The maximum amount you can invest is restricted to £20,000 per person (£10,000 in each bond). It should be noted that you cannot take an income from the bond during the course of the term and will collect the interest at the end.

Cash Isa allowances

Savers have until 6 April 2015 to use up their tax-free Isa £15,000 allowance for the 2014/15 tax year. This limit for new Isas, or ‘Nisas’, can now be made up of cash, or stocks and shares, or a mixture of both.

The Which? Money Compare tables let you search hundreds of savings accounts and cash Isa deals from providers large and small so that you can find a great home for your nest egg. We also combine this with our unique customer scores that show you how well the provider you pick will treat you in the long run.

Which? Money Compare Table: Savings and Isas – hundreds of deals compared

More on this…

Which? Ltd is an Introducer Appointed Representative of Which? Financial Services Ltd, which is authorised and regulated by the Financial Conduct Authority. Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of a provider before committing to any financial products.

Categories: Money, Savings & Isas

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