Savers risk losing tax benefits when transferring between ISA accounts

Financial regulators and savings providers in the UK are warning people not to make a common mistake when switching ISA accounts. An ISA is a savings account where you pay no tax on the interest you earn.

Many savers withdraw their money themselves before moving it to a new provider. This is wrong, and it can permanently remove the tax-free status of that money. Instead, savers should contact the new provider and complete a transfer form.

Cash ISA transfers must be completed within 15 working days. Other ISA transfers must be done within 30 calendar days. Some fixed-rate accounts will charge a penalty for early withdrawal. Providers may also charge fees for transfers, so savers should check this before they move their money.