Switching investment platforms can feel daunting, particularly when an ISA or SIPP holds years of accumulated contributions and gains. But platform transfers are a routine, regulated process, and most of the risk in a switch comes down to two avoidable things: unnecessary fees, and unnecessary time spent out of the market while assets are moved. With a bit of planning, both can usually be minimised.
Why investors switch platforms
- The current platform's charges have become expensive relative to the portfolio's size (see the article on fixed versus percentage fee brokerages for how this crossover works).
- The desired funds or account types (for example, a Lifetime ISA or Junior ISA) aren't available on the current platform.
- Consolidating several old pensions or ISAs onto a single platform for simplicity.
- The current platform's service, app, or tools no longer meet the investor's needs.
In-specie transfer versus cash transfer
There are two fundamentally different ways to move an investment account between platforms, and the choice matters a great deal for cost and time out of the market.
In-specie transfer
An in-specie transfer moves the actual fund holdings from one platform to another without selling them, provided both platforms support the specific funds involved. This avoids the investor being out of the market, since the holdings remain invested throughout. It also avoids triggering a Capital Gains Tax event on a General Investment Account (GIA), since no disposal has taken place. In-specie transfers are typically available for ISAs and SIPPs moving between platforms that both support the underlying fund range, though not universally — some platforms cannot accept certain fund share classes in specie.
Cash transfer
A cash transfer involves selling the holdings on the old platform, transferring the resulting cash, and then repurchasing similar holdings on the new platform. This is sometimes unavoidable — for example, if the new platform does not offer the exact fund or share class held previously — but it means the money is out of the market for the duration of the transfer, which can range from a few days to several weeks depending on the platforms involved. During that window, the transferred sum does not benefit from (or suffer from) market movements at all.
A worked hypothetical example of time out of the market
Suppose an investor transfers £60,000 from one platform to another via a cash transfer that takes three weeks to complete, during which global markets happen to rise by 2%. In this hypothetical scenario, the investor's £60,000 would have grown to roughly £61,200 had it remained invested throughout, but instead sits in cash earning little or no return during the transfer window — an opportunity cost of around £1,200, purely due to timing, that an in-specie transfer of the same holdings would have avoided. It's worth stressing this cuts both ways: had markets fallen 2% instead, the cash transfer would have avoided that fall. The point of an in-specie transfer isn't to guarantee a better outcome, but to remove this unpredictable timing risk altogether.
Step-by-step: how a typical transfer works
- Open the new account first. The new platform needs an active account (ISA, SIPP, or GIA of the matching type) before a transfer can be initiated.
- Request the transfer through the new platform, not the old one. Nearly all UK platforms handle transfers-in as the receiving party, using a standard industry transfer process, rather than requiring the investor to contact the old platform directly.
- Specify in-specie if it's available and desired. This is usually a checkbox or explicit option during the transfer request — it is easy to default into a cash transfer without noticing.
- Check for exit fees on the old platform and whether the new platform offers to cover or refund them, often up to a stated maximum, as part of a switching incentive.
- Confirm ISA transfer rules are followed. An ISA must always be transferred using the official ISA transfer process rather than withdrawn and reinvested, otherwise the tax-free wrapper is lost and the money would count against the current year's £20,000 ISA allowance if reinvested.
- Wait for confirmation and check the new account. Once complete, verify that the correct funds, unit numbers, and any historical cost-basis information (relevant for GIAs and future CGT calculations) have transferred correctly.
Common pitfalls
Withdrawing an ISA instead of transferring it
Withdrawing cash from an ISA and paying it into a new one is not the same as an ISA transfer — it uses up that year's ISA allowance and permanently loses the tax-free wrapper on any amount above the current year's allowance. ISA transfers must go through the formal transfer process to preserve the wrapper in full.
Assuming in-specie transfer is always available
Not every platform accepts every fund or share class in specie. If the destination platform doesn't offer the exact fund held, a cash transfer (or a fund switch before transferring) may be unavoidable.
Overlooking exit fees until after the fact
As covered in the companion article on hidden platform costs, exit fees are often charged per holding, so consolidating several funds into fewer holdings before a transfer can sometimes reduce the total exit cost.
Underestimating transfer times
SIPP transfers, in particular, can take longer than ISA transfers, sometimes several weeks, especially where the old scheme requires additional paperwork or where the transfer involves an older-style pension with safeguarded benefits (which may require financial advice before transferring, by law).
Switching within a SIPP versus switching an ISA
While the general principles of transferring are similar, SIPP transfers involve an additional layer of process because pensions are subject to specific regulatory protections designed to prevent scams and to safeguard valuable benefits.
Additional checks that apply to pension transfers
- Where a pension has "safeguarded benefits" (such as a guaranteed annuity rate) worth more than a set threshold, UK rules generally require the saver to take regulated financial advice before the transfer can proceed, and the receiving scheme will typically ask for evidence that this advice has been obtained.
- Some receiving schemes carry out additional due diligence checks before accepting a pension transfer, partly as a result of industry-wide efforts to reduce pension scams — this can occasionally add a few extra days or weeks to an otherwise straightforward transfer.
- Where an employer contributes to a workplace pension, moving away from that scheme into a personal SIPP would usually stop those employer contributions, so it's worth checking whether ongoing employer contributions are involved before transferring an active workplace pension, as distinct from consolidating an old, no-longer-contributing scheme.
What happens to regular contributions during a switch
An investor with a regular monthly contribution set up on their old platform needs to separately arrange for that contribution (and any employer or government top-up, in the case of a workplace pension or Lifetime ISA) to be redirected to the new platform — a platform transfer moves existing holdings, but does not automatically reroute future contributions from a payroll or bank mandate. Overlapping the timing carefully (stopping the old contribution and starting the new one) helps avoid an accidental gap in saving, or, in the case of employer pension contributions, a payment being misdirected to a closed or transferring scheme.
Timing a switch around tax year boundaries
Because ISA transfers use the official transfer process rather than counting as a new subscription, they can generally be carried out at any point in the tax year without affecting the current year's £20,000 ISA allowance. It's nonetheless often practical to plan a switch either well before or well after the 5 April tax year end, simply to avoid any ambiguity in paperwork that spans two tax years, and to make sure that any final-days-of-the-tax-year contributions intended for the current year's allowance are not delayed by an in-progress transfer.
Practical checklist before initiating a switch
- Confirm the new platform supports in-specie transfer for the specific funds held.
- Check the old platform's exit fees and whether the new platform will refund them.
- Use the official ISA or pension transfer process — never withdraw and reinvest manually to "switch".
- Ask the new platform for an estimated transfer timeframe, and query if it seems unusually long.
- Keep records of the original purchase costs for any GIA holdings, relevant for future CGT calculations (the CGT annual exempt amount for 2025/26 is £3,000).
What to do with the account being left behind
Once a transfer has completed, it's worth explicitly confirming that the old account has been closed (where intended) rather than left open and forgotten, particularly if it carries any minimum or inactivity charges of the kind discussed in the companion article on hidden platform costs. It's also worth downloading or saving copies of historical statements and contract notes from the old platform before closing it, since access to these records can become more difficult once an account is closed, and they may be needed later for tax records (particularly for a GIA, where historical purchase costs matter for future CGT calculations) or simply for the investor's own record-keeping.
Key takeaways
- Platform transfers are routine and regulated, but the two real risks are unnecessary fees and unnecessary time spent out of the market.
- In-specie transfers move actual holdings without selling, avoiding both a forced cash-out and time out of the market; cash transfers involve selling and repurchasing, with a market-timing risk in either direction.
- ISAs must always be transferred using the official transfer process, never withdrawn and reinvested, to preserve the tax-free wrapper.
- Exit fees are often charged per holding, so it's worth checking the old platform's fee schedule and any refund offered by the new platform before switching.
- SIPP transfers can take longer than ISA transfers and may require extra care where older pensions with safeguarded benefits are involved.