Are funds held in an ISA being considered for Premium Bonds but the transfer process looks unclear? This guide explains, in plain British English, exactly how the ISA to Premium Bonds transfer process works, the paperwork required by NS&I, what counts as a legal transfer versus withdrawal and repurchase, and realistic timings so a decision can be made with confidence.
Key takeaways: what to know in one minute
- Yes, an ISA can be moved to Premium Bonds, but the method depends on the ISA type and the receiving provider (NS&I).
- Do not withdraw and repurchase if the aim is to keep tax advantages — use an authorised transfer using the ISA transfer process to preserve ISA wrapper benefits.
- You will need NS&I transfer forms and a completed transfer instruction from the current ISA manager; NS&I will not accept direct deposits labelled as transfers without paperwork.
- Transfers can be partial or total, but rules differ between cash ISAs, stocks & shares ISAs and lifetime ISAs; annual subscription limits and tax positions must be checked before transfer.
- Typical times range from 7 to 30 working days, depending on the provider, transfer type and whether partial or full transfer is requested.
Can I transfer my ISA into Premium Bonds?
Yes, transferring an ISA into Premium Bonds is possible but not always straightforward. Premium Bonds are issued by National Savings & Investments (NS&I) and offer a prize-based return rather than interest. To preserve the ISA wrapper and avoid creating a taxable event, funds should be moved using the official ISA transfer process rather than withdrawing cash and buying Premium Bonds with the proceeds.
Key conditions:
- The current ISA manager must agree to an ISA transfer and complete the relevant transfer instruction.
- NS&I must accept the incoming funds as an ISA transfer and issue Premium Bonds into a qualifying ISA wrapper if the product is being used within an ISA (for 2026 NS&I offers a 'Premium Bonds ISA' known as a Direct ISA product for some cases — check NS&I product pages).
- If the transfer is not processed as an ISA transfer (for example, money is withdrawn and repurchased), the ISA allowance or tax status may be affected.
Authoritative sources:
Which types of ISAs can be transferred into Premium Bonds and what changes apply?
Transfers depend on ISA type. The common cases are:
- Cash ISA: typically eligible to transfer to Premium Bonds via an ISA transfer. A cash ISA transfer to Premium Bonds will move funds while keeping the tax wrapper intact.
- Stocks & shares ISA: can normally be transferred, but investments must first be sold or transferred in-specie depending on circumstances; NS&I only accepts cash for Premium Bonds, so the provider will usually sell assets and transfer cash.
- Lifetime ISA (LISA): special rules apply. Transfers from a LISA to another LISA or into a pension are allowed under certain conditions. Transferring a LISA into Premium Bonds may trigger penalties or be disallowed as a straight ISA-to-Premium Bonds ISA transfer. Always check the LISA rules and consider tax consequences.
- Junior ISA: transfers are possible but the receiving NS&I product must accept Junior ISA transfers and the account ownership rules for minors continue to apply.
Practical notes:
- When moving from a stocks & shares ISA, expect realisation of investments and potential settlement delays before funds move.
- The ISA transfer preserves the tax wrapper only if processed correctly through the transfer system; withdrawing cash and buying Premium Bonds outside the transfer framework will use current year ISA subscription allowances and may create additional tax/reporting consequences.
Step-by-step ISA to Premium Bonds transfer process (what to do)
Step 1: Check eligibility and product details
- Verify the current ISA type and whether NS&I accepts that ISA as an in-spec transfer destination. Use NS&I Product pages to confirm available ISA-compatible Premium Bonds options.
- Confirm whether the transfer will be full or partial and whether the transfer includes current year subscriptions or previous years’ subscriptions (this affects allowance treatment).
- Request an ISA transfer form or state the intention to transfer to NS&I. Ask for the provider’s exact process, timescales and any exit charges. Provider contact details are usually on statements or the provider website.
- If transferring a stocks & shares ISA, ask whether holdings can be transferred in-specie. For Premium Bonds, NS&I accepts cash, so expect a sale of investments.
- Download and complete NS&I’s ISA transfer forms (or request them by post). NS&I requires formal paperwork to accept and record an ISA transfer.
- Complete the transfer instruction from the current provider naming NS&I as the receiving ISA manager and provide NS&I account details as requested.
Step 4: Submit the transfer instruction and supporting documents
- Send the completed forms to the current ISA manager (and to NS&I if required). Use recorded delivery if posting originals is necessary.
- Retain copies of all correspondence and dates for follow-up.
Step 5: Await confirmation and monitor the transfer
- The ISA manager should acknowledge the transfer and set expected timings. NS&I will confirm receipt and issue Premium Bonds under the ISA wrapper once funds arrive and processing completes.
- If settlement of investments is required, allow for trade settlement periods (typically 2–7 working days) plus processing.
Step 6: Verify completion and keep records
- Confirm the transferred amount appears in the NS&I Premium Bonds account and the ISA manager has closed or adjusted the original ISA as instructed.
- Keep paperwork for tax records and future queries.
- NS&I transfer application form: the official NS&I form tailored for ISA transfers into Premium Bonds. This is needed to set up the receiving account and record the transfer provenance.
- Current ISA manager transfer-out form or instruction: many providers will request that the incoming transfer is initiated by the existing provider once the customer signs the transfer request; some use a single form process.
- Identification documents: rarely required for straightforward transfers between UK providers, but NS&I or the current provider may request proof of identity or address in some cases.
- For stocks & shares ISAs: settlement confirmations or instruction to sell holdings may be required.
Useful links and how to obtain forms:
- NS&I ISA transfer guidance and forms: NS&I help and guidance.
- Check the current provider’s online customer portal for a transfer section or call customer services for a transfer pack.
Tax implications and annual subscription limits explained (what happens to allowances)
- An ISA transfer preserves the tax-free status of the transferred funds if processed correctly. That means interest, income and gains remain tax-free inside the ISA wrapper after the transfer.
- Annual ISA subscription limit for 2025/26 and indicative for 2026 is subject to change; the current limit should be confirmed at Gov.uk. Transfers of previously subscribed tax years do not affect the current year's allowance if handled as transfers.
- If money is withdrawn from an ISA and then used to buy Premium Bonds without applying the transfer mechanism, it counts as a new subscription and may use part of the current year’s allowance. This is particularly important when planning multiple subscriptions in one tax year.
- Transfers from a Lifetime ISA may trigger chargeable events or be subject to LISA withdrawal penalties unless the transfer is to another LISA or specified permitted destination. Confirm LISA-specific rules before initiating a transfer.
Indicative example:
- If £10,000 from a previous tax year Cash ISA is transferred to NS&I Premium Bonds using the authorised transfer, it remains tax-free and does not affect the current year £20,000 allowance (example limit). If the £10,000 is withdrawn and repurchased, it would use £10,000 of the current year allowance.
How long ISA to Premium Bonds transfers typically take (realistic timings)
- Cash ISA full transfer to NS&I: typically 7–15 working days when no complex settlement is required.
- Small partial cash ISA transfer: 5–10 working days depending on provider responsiveness.
- Stocks & shares ISA where holdings must be sold: 2–6 weeks is common because sales, settlement and transfer paperwork add time.
- Transfers involving junior accounts, LISAs or cross-border complications may take longer and require additional checks.
Common causes of delay:
- Missing or incorrectly completed forms.
- Provider-specific processing windows (some providers batch transfers weekly).
- Sale and settlement of investments in a stocks & shares ISA.
- Verification checks for identification or address changes.
Practical examples: partial vs total transfer and the allowance impact
| Scenario |
Transfer method |
Impact on ISA wrapper |
Typical time |
| Full transfer of a previous-year cash ISA (£15,000) |
Authorised ISA transfer to NS&I |
Wrapper preserved, no effect on current year allowance |
7–15 working days |
| Partial transfer of current-year cash ISA (£5,000) |
Request partial transfer via provider |
May use current year subscription rules; confirm provider handles partial transfers |
5–12 working days |
| Stocks & shares ISA where investments sold then transferred (£20,000) |
Provider sells holdings, transfers cash |
Sale may crystallise gains outside ISA if handled incorrectly; ensure transfer is authorised |
2–6 weeks |
[Element visual] transfer flow (text infographic)
ISA to Premium Bonds transfer flow
🔎 Step 1: Check eligibility
Confirm ISA type, NS&I product and paperwork.
✍️ Step 2: Complete forms
Sign transfer instruction with current provider and NS&I forms.
📤 Step 3: Submit
Send documents (recorded delivery if posting) and keep copies.
⏳ Step 4: Wait and verify
Monitor provider updates and confirm Premium Bonds credited under ISA wrapper.
Typical 7–30 working days
Keep records: audit trail
Advantages, risks and common mistakes when using the ISA to Premium Bonds transfer process
Benefits / when to consider transferring ✅
- Preserves the ISA tax wrapper when performed as an authorised transfer.
- Moves cash into a low-risk, government-backed UK savings vehicle (NS&I Premium Bonds).
- May simplify a savings strategy for savers who prefer prize-based returns over interest or market exposure.
Risks and errors to avoid ⚠️
- Withdrawing funds and repurchasing Premium Bonds without using the transfer route can unintentionally use the current tax-year ISA allowance and may forfeit tax-protection on previous subscriptions.
- Transferring a LISA without checking consequences can result in penalties.
- Not completing or sending required forms correctly is the most common cause of delay.
- Selling investments in a stocks & shares ISA without confirming timing can create settlement and market timing risks.
What protection and regulatory differences apply?
- Premium Bonds are backed by Her Majesty’s Government and are not covered by the Financial Services Compensation Scheme (FSCS) in the same way as bank deposits; instead, NS&I is a government-backed institution and historically regarded as secure. For official wording see NS&I guidance.
- Cash held by banks and building societies is usually FSCS-protected up to the stated limit; transferring into NS&I changes the regulatory backing to government-guaranteed instruments.
FAQ: common questions about the ISA to Premium Bonds transfer process
Can I move a current-year ISA subscription into Premium Bonds and keep my allowance?
Yes, if the transfer is executed as an authorised ISA transfer it will not use up additional current-year allowance beyond what was already subscribed. Withdraw-and-rebuy methods do use the allowance.
Will transferring a stocks & shares ISA to Premium Bonds trigger capital gains tax?
The sale of investments within the ISA manager is handled as part of the transfer and should not create a taxable event if the transfer is authorised. However, confirm with the provider that holdings will be sold within the ISA wrapper before transfer.
Does NS&I accept in-spec transfers of shares for Premium Bonds?
No. NS&I accepts cash for Premium Bonds, so in-spec transfers of shares are not applicable — providers will usually sell holdings and transfer cash.
Can a Lifetime ISA be transferred into Premium Bonds?
A Lifetime ISA may have restrictions; transferring out of a LISA can create penalties or tax charges. Confirm LISA rules on Gov.uk: Lifetime ISA before attempting a transfer.
How are partial transfers handled?
Most providers allow partial transfers. Specify the exact amount and whether it represents current-year subscriptions or prior-year funds to ensure correct handling.
What if my current ISA manager refuses the transfer?
Providers are required to follow ISA transfer rules. If a refusal occurs, request written reasons and escalate via the provider’s complaints procedure or contact the Financial Ombudsman Service if necessary.
Will moving to Premium Bonds remove my entitlement to ISA tax benefits in future?
No, provided the movement is an authorised ISA transfer. The funds remain within the ISA wrapper and retain tax benefits.
Who pays for the transfer — are there charges?
Providers may levy exit or administration fees. Confirm any applicable charges with the current ISA manager and NS&I before starting the transfer.
Conclusion
A correctly executed ISA to Premium Bonds transfer process preserves the tax advantages of the ISA while allowing savers to move into NS&I’s prize-based product. The critical success factors are using authorised transfer routes, completing NS&I and provider paperwork accurately, and confirming timescales and any provider charges in advance.
Your next step:
- Check eligibility: confirm ISA type and NS&I product suitability and download the NS&I transfer form.
- Contact the current ISA manager: request a transfer pack and ask about any fees or required sales of holdings.
- Submit signed transfer instruction and keep copies; monitor progress and confirm Premium Bonds credited under the ISA wrapper.