Finance expert Martin Lewis has shared a “really important” move you can make with your ISA to get the best rates
A financial expert has revealed a “really important” step you can take to maintain the tax-free status of your ISA. This will also help you to secure the best available rates.
An Individual Savings Account (ISA) enables people to save money and earn interest free from tax. However, the rate of interest you receive depends on the deal you manage to secure at the time from your bank or building society.
You might assume this means you’re stuck with the account you have. But Martin Lewis clarified that this isn’t the case. In a video posted on his Money Saving Expert (MSE) website, Martin explained that you can transfer your ISA.
He stated: “If you’ve got money in an ISA, don’t think it’s a done deal and you can’t do anything with it. You have a right to transfer ISAs, you can move it to another payer to get a better deal, whether it’s improving the interest on your cash ISA, or getting a better selection of stocks and shares into your shares ISA.”
There is an annual limit on how much you can hold in an ISA. Currently, this limit is £20,000 for the year 2025/26, with the new financial year commencing in April. This limit is set to remain the same for 2026/27 but is expected to change the following year.
Martin added: “And when you do do a transfer, it doesn’t use up this year’s allowance, it doesn’t stop you putting new money in.” He outlined a specific method to ensure your interest continues to be tax-free.
“But it’s really important that to do a transfer you don’t take your money out of your existing ISA and then put it in a new one.
“You go apply to a new provider and on its forms, it’ll have a bit about transfers that you fill in. Then, the new provider takes the money from the old ISA for you and puts it into its ISA.
“That way you keep it inside the ‘ISA wrapper’. It stays protected, it stays tax-free. You’ve now just got your cash or shares ISA in the place you really want it to be.”
Nevertheless, in a caption, he stressed the importance of checking for possible exit charges if you hold a shares ISA before transferring your funds. Whilst “not common”, it’s advisable to verify this beforehand.
For further details on ISAs, visit the MSE website here.
Reforms for 2027
From 6 April 2027, the annual Cash ISA threshold for individuals under 65 will drop to £12,000 as part of a new dual-tier structure aimed at promoting investment.
Whilst the overall ISA allowance is expected to stay at £20,000, the remaining £8,000 must be allocated to Stocks and Shares or Innovative Finance ISAs.
