Ask us a question: How long do ISA transfers take – and will I miss the deadline for this tax year now?

Each week our Finance Editor, Clare West answers reader’s questions. If you’ve got a question you’d like answered, drop us a message at hello@investinginsiders.co.uk and we may feature your question next week.

This week’s question…

Q. “How long do ISA transfers take – and will I miss the deadline for this tax year if I start a transfer now?”

ISA transfer times vary but expect it to take weeks rather than days. Especially as we head into “ISA season” when providers are very busy. However, even if your transfer drags on, you won’t be penalised as long as you initiated it before the end of the tax year (5 April).

One thing to make clear at this point: only contributions made towards your current year’s ISA allowance have a deadline. Tax year deadlines are irrelevant to ISAs established in previous years.

In an abundance of caution (I’m thinking about rare, but possible, administrative errors that mean your provider doesn’t initiate the request in time), it’s wise to request a transfer as far in advance as possible. That’s especially true if 5 April falls on a weekend or public holiday.

But, as long as you have confirmation from your provider that it’s in the system before the deadline, the money can arrive in your new ISA after 5 April and still be treated correctly.

There’s one really important rule to remember, whether you’re transferring an old or new ISA: transfers must be done using the official ISA transfer process. If you withdraw the money yourself, you unseal the tax wrapper, pull that money into a taxable environment, and when you pay the money into a new ISA, it’ll count towards your current year’s annual allowance. That makes it a potentially very expensive mistake.