How do you switch Isa provider?
If you’re in the market for a new, better-paying Isa, there’s one thing you shouldn’t do.
Never withdraw money from your Isa account to put it into your new one – if you do it’ll lose its tax-free benefits.
Instead, you need to follow the simple transfer process.
Make sure that the new account you want to use accepts transfers (not all do) and then fill in the Isa transfer form with the new provider.
It will arrange for your savings to be transferred over, with the process taking no more than 15 working days.
And remember, you can only have one “active” cash Isa per tax year.
If you put your cash in a bog standard bank account that’s not an Isa, you’ll be taxed on any interest over £1,000 if you’re a basic-rate taxpayer.
For higher rate taxpayers it’s £500 while additional rate taxpayers don’t get this allowance, which is known as the personal savings allowance (PSA).
The Isa tax-free allowance is more generous than the PSA which is useful if you have more saved.
