ISAs are a great tool for investing your money and being tax efficient.
Every tax year, all ISAs have a maximum contribution limit – referred to as your annual ISA allowance - that you can pay into your account without being taxed on returns or growth. In the 2022 to 2023 tax year, the maximum you can contribute into a cash ISA or a stocks and shares ISA is £20,000. The deposit limit for Junior ISAs (JISAs) is £9,000. For the 2023 to 2024 tax year, the limit will remain the same.
If you have both a stocks and shares ISA and a cash ISA, the annual allowance is still £20,000 in total for all of your contributions, and not £20,000 per account.
A child can only ever hold one cash and one stocks and shares Junior ISA in their lifetime. Parents or guardians must open the Junior ISA and, unlike adult ISAs, can’t open multiple JISAs in different tax years. If you wish to open a stocks and shares JISA with John Lewis Investments, for example, but your child already has a stocks and shares JISA with another provider, you must first transfer the existing JISA. The £9,000 JISA annual allowance applies per child.
An ISA transfer is a way to move your money from one ISA to another without losing any tax benefits. It’s a relatively straightforward process, but there are a few rules around transferring ISAs that you need to follow to keep your money free of tax on growth, returns or interest.
If you decide you want to combine some of your ISAs with one provider, it’s important you do this through your providers. Instead of taking the money out and depositing it into a new account, the new ISA provider is in charge of transferring the money. By doing this, you can stay within the tax-efficient wrapper, as a way to shield your investments and savings from tax.
You can transfer money from a stocks and shares ISA or a cash ISA, as long as the new account accepts transfers.
Some of the key reasons to transfer an ISA are:
Potentially earn better returns
Pay lower fees
The freedom to switch to a product that suits you better
It also means you can combine multiple pots into one, which may make it easier to manage your investments, as you can transfer funds from one stocks and shares ISA to another, or from a cash ISA to a stocks and shares ISA.
When transferring ISAs, following the ISA transfer rules can help you protect and retain your tax-efficient benefits. If you transfer funds from one ISA to another by yourself, your funds could lose their tax-efficient status.
When transferring ISAs with us, we’ll be able to transfer the funds on your behalf. There is no deposit limit when it comes to transferring one ISA to another.
When transferring ISAs, it’s important to follow the transfer rules otherwise you might end up paying tax on your money.
Here are the ISA transfer rules:
You can transfer an ISA at any time
You can move money between ISAs, such as moving money from one stocks and shares ISA or cash ISA to another, or from a cash ISA to a stocks and shares (and vice versa)
If you’re transferring an ISA you’ve contributed to in the current tax year, you need to move the entire amount
For money transferred from previous years, you can choose how much you move. There is no limit, and it doesn’t impact your current tax year’s ISA allowance
ISA providers must let you transfer money out of an account, but they don’t have to let you transfer in – so check these are allowed first
There may be a minimum deposit to open an ISA. For example, at John Lewis, to open a JISA, you’ll need to deposit or transfer £100 in, or £500 with our stocks and shares ISA
Some stocks and shares ISA providers will charge you for transferring ISAs
There may be a penalty if you transfer a cash ISA during a fixed-interest rate period
If you want to transfer an existing ISA to one with John Lewis, we have all the information you need to make the process as smooth as possible.
1. If you’re a new customer without a John Lewis Investment account, you’ll need to sign up for one. You can transfer an ISA as part of the set-up process for the new account or you can choose to do this once the account is set up. If you already have an account, you just need to sign in.
2. Enter the details of your current ISA (the one you want to transfer over). We accept transfers from both stocks and shares ISAs and cash ISAs.
3. We can usually complete the ISA transfer online, but if not we have a form you will need to sign and send to your existing provider. If this is the case, we'll check in with you when you are completing the form to make sure everything is in order, before your transfer is ready to go.
4. Once we receive details of your ISA transfer, we will speak to your current provider and move your money over, which can take between 15 and 30 days.
5. The investments you hold in your current stocks and shares ISA (if that is the type of account you’re transferring), will be sold by the previous investment manager and the ISA is transferred to us as cash ready to be reinvested. However, this only applies if you’re transferring from one stock and shares ISA into another. If you’re transferring money from a cash ISA to a stocks and shares ISA, this won’t apply.
6. We won’t charge for the transfer itself, but there is an annual management fee against the value of your investment portfolio. We’ll let you know how much it will cost over the next 12 months, in case you need some time to decide whether you want to go ahead with a transfer.
If you transfer a JISA, the journey is the same as if you were transferring a stocks and shares ISA. However, with a JISA only a full transfer is permitted.
1. If you’re a new customer without a John Lewis Investment account, you’ll need to sign up for one. You can transfer a JISA or Child Trust Fund as part of the usual set up process for the new account or you can choose to do this once the account is set up. If you already have an account, you just need to sign in.
2. Enter the details of your current JISA (the one you want to transfer over).
3. We can usually complete the JISA transfer online. If you are unable to do it online, we have a form you will need to sign and send to your existing provider. We’ll check in with you when you are completing the form to make sure you have everything you need.
4. Once we receive details of your JISA transfer, we will speak to your current provider and move your money over, which can take between 15 and 30 days.
5. The investments you hold in your current JISA will be sold by the previous investment manager, and the JISA will be transferred to us as cash ready to be reinvested.
6. We won’t charge for the transfer itself, however there is an annual management fee against the value of your investment portfolio. We will let you know how much it will cost over a 12-month period before you transfer your JISA.
It’s also worth remembering that while you can transfer the money within a JISA, your child won’t be able to access the funds until they turn 18.
Under current ISA transfer rules, it should take no longer than 15 working days when transferring a cash ISA and 30 calendar days for other types of ISA transfer.
If you’re transferring into one of our ISAs and it takes longer than the number of days mentioned above, make sure you contact us as soon as possible.
If you don’t get a satisfactory response from the provider, you can contact the Financial Ombudsman Service (FOS).
John Lewis Investments will not charge you to transfer an ISA to us or away from us to another provider, however we always recommend checking with your existing provider in case they have any transfer fees.
You may be charged for transferring a stocks and shares ISA, but you should be told about these fees before you make the transfer. If it’s a cash ISA and you transfer money out during a fixed term of interest, there may be a penalty of a set number of days’ interest.
With any investment your capital is at risk. Tax treatment depends on your individual circumstances and may change in the future. For more information, read our terms and conditions.
As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. A stocks and shares ISA may not be right for everyone and tax rules may change in the future. If you are unsure if an ISA is the right choice for you, please seek financial advice.
To open a John Lewis Investments JISA, your child must be under the age of 16 and funds cannot be withdrawn until your child turns 18. Tax treatment depends on your individual circumstances and may be subject to change in the future. If you are unsure if a Junior ISA is the right choice for you and your child, please seek financial advice.
John Lewis plc trading as John Lewis Finance acts as an Appointed Representative of Nutmeg Saving and Investment Ltd for the purpose of making introductions to Nutmeg and distributing financial promotions. John Lewis Investments services are provided by Nutmeg Saving and Investment Limited; authorised and regulated by the Financial Conduct Authority, no. 552016, registered in England and Wales, no. 07503666, with a registered office at 25 Bank Street, Canary Wharf, London E14 5JP.