How Much Can I Put In An ISA?

How Much Can I Put in an ISA?

The amount of money a saver can contribute to their ISAs each year is affected by the current ISA allowance.

The current ISA allowance per person for 2020-21 is £20,000.

Adult Cash ISAs, Investment ISAs and the not yet launched Lifetime ISA all sit within the same overall contribution limit.

Junior ISAs have their own separate annual allowance.

The current junior ISA per child is £9,000.

The ISA allowance is the maximum amount you are allowed to invest each tax year across all of your ISAs, this means that if you have more than one type of ISA you will need to break your ISA allowance up across your ISAs to ensure that you do exceed the overall limit.

Each ISA may have their own additional specific limitations imposed by the provider such as a minimum investment amount.

The maximum ISA allowance is reviewed annually so make sure you’re always up to date with how much you can save.

Transferring an ISA

If you want to move your money already in an ISA to another one, with either the same or a different provider, there is a specific way of doing so. 

This is because if you just withdrew money as cash and paid it in to another ISA this would count towards your allowance for that tax year and you would lose the tax-free benefits. This could be avoided by doing an ISA transfer instead.

You can transfer all or some of your ISA balances and you are permitted to transfer between different types of ISA such as from Cash ISA to a Stocks and Shares ISA or vice versa.

Thanks to recent guidelines, transferring an ISA from one provider to another is now a fairly straightforward process:

• 1.Once you have sent off the ISA transfer form, your new ISA provider should contact your current ISA provider within five working days. The ISA transfer process should take no longer than 15 working days
• 2.When an ISA is transferred, the old ISA manager must give the new ISA manager a notice in writing containing information and a declaration, known as a transfer history form
• 3.Once the transfer is done, your new ISA provider will be in touch to confirm this

Is there a Charge for Transferring an ISA?

Your existing ISA manager cannot stop you transferring, but they may charge you for it. 

However, this is becoming less common, particularly with cash ISAs.

You should contact your current ISA provider and confirm their policy on this before making a decision.

Are there any ISA Rules?

While ISAs can be straight forward, there are some rules to follow and it’s useful to know before you get started:

The rules on ISAs have been relaxed since April 2016 and you can now choose how you split your savings.

• Some accounts have penalties if you withdraw early, particularly fixed rate accounts. Be careful to check your provider’s rules as you could leave with less than you invested if you close early
• You must use a transfer form if you want to transfer accounts. If you don’t follow the transfer procedure and simply withdraw the money yourself then you lose all tax benefits for that year
• Transferring your ISAs should take no more than 15 days although transferring from a cash ISA to a stocks and shares ISA can take longer