Martin Lewis has issued a warning about ISA regulations after a saver reported being denied a service by their account provider. The consumer champion responded on social media after an individual tried to follow advice given on his BBC podcast regarding ISA transfers.
The saver asked: "You suggested on your podcast that for the new tax year, we could put £20,000 of new money into our ISA, whilst also transferring £4,000 from last year's ISA to our LISA for the new tax year." However, when they attempted the transfer, their LISA provider refused, citing rules from the previous provider that prohibit partial transfers of current tax-year ISA subscriptions into a Lifetime ISA.
Addressing the issue, Lewis explained: "The question [on the podcast] was about the ISA rules, but individual providers can have terms and conditions which are more restrictive unfortunately." He emphasised that while HMRC rules allow such transfers, providers may impose stricter conditions.
Separately, Lewis highlighted upcoming changes to ISA allowances. From April 2027, the cash ISA allowance will be effectively reduced. Currently, savers can deposit up to £20,000 annually across cash and stocks and shares ISAs. From then, only £12,000 can be allocated at the saver's discretion, with the remaining £8,000 required to go into stocks and shares ISAs. Those aged 65 and over will retain the existing allowance.
