Stocks and shares Isa transfers: what savers need to know about fees and delays

Survey finds most switchers avoid trouble

A Which? survey of 537 members holding stocks and shares Isas, carried out in October, found that close to one in five had transferred their Isa within the last five years. Among those who had not switched, 16% said they did not think it was worth the hassle. Of those who had gone through with a transfer, only 10% reported a negative experience.

Fees can run into thousands of pounds a year

Providers typically charge either a percentage-based fee or a fixed monthly fee for holding an account. Which? says investors with £50,000 or less are generally better off with a percentage-based fee, while those holding more than £50,000 often find fixed-fee providers cheaper. Some platforms charge no account fee at all, making them competitive across the board, though Which? notes these providers can still make money through transaction charges, foreign exchange fees, or by promoting higher-risk products.

For investors with large sums held, the gap between the cheapest and most expensive provider can amount to thousands of pounds a year. For those with smaller amounts invested, high fees can eat up a large share of overall returns.

Transfers should take 30 days, but some take far longer

Under government guidance, Isa transfers are expected to be completed within 30 days. However, cases raised with the Financial Ombudsman Service have involved delays of up to six months. Delays can leave savers uncertain about the status of their money, and if investments are sold and held as cash during a prolonged transfer, savers risk missing out on market movements in the meantime.

Which? says that if a transfer is delayed, savers can complain to both their old and new providers, who may offer compensation for the inconvenience.

What to check before switching

Savers can choose to transfer their Isa either as cash or still invested, known as an in-specie transfer. A Which? writer who recently switched providers opted for an in-specie transfer to avoid timing the buying and selling of investments, but found the transfer settled as cash after a month. This was because identical-sounding funds held on each platform were in different share classes, distinguished by letters such as “A” or “Z” after a fund’s name, which denote different fees or voting rights despite holding the same underlying assets.

Some platforms allow savers to search their fund range in advance using a fund’s ISIN code, a unique identifier such as “GB0123456789”, to check whether the exact share class they hold is available before registering for an account.

What happens next

Savers considering a switch are advised to check a new provider’s specific terms and conditions, and confirm whether their existing funds are available in the same share class, before starting a transfer. Anyone facing delays beyond the standard 30-day window can raise a complaint with their old and new providers, with the option of referring unresolved disputes to the Financial Ombudsman Service.