I can’t find a bank to take the Isas I’ve inherited

5 October 2015


My wife died in December 2014 and left substantial Isas in Santander and Nationwide. The Isas were made into inheritance Isas in the respective bank and building society.As I also had substantial Isas with both Nationwide and Santander, the combined totals placed me well over the £85,000 Financial Services Compensation Scheme (FSCS) limit.I have tried to find another provider of inheritance Isas that will accept a transfer without success. At the time of taking out the inheritance Isas, both banks concerned seemed to know little about the product they were marketing and indeed the situation still seems to prevail today.Please can you give information of any other inheritance Isa providers and whether I am able to transfer the Isas.


The first thing to understand is that there are no such thing as inheritance Isas, which is why you have struggled to find where you can move your money.You have inherited your wife’s Isas and now you need to convert them into your own Isas.

As you rightly point out, on your wife’s death you inherited an extra Isa allowance equal to the value of her Isas on the date of her death.This is known as an Additional Permitted Subscription (APS), and there is a separate APS with each of her Isa providers.

When this happens, you have two options if you wish to use the allowance. You can either do so with the original provider or move the APS to a new provider.

However, as you have also discovered, as a newly introduced allowance, many of the savings providers do not offer the facility to transfer an APS allowance at the moment.

But you can open an Isa account with the original provider and make an APS payment either from the proceeds of the estate once probate has been settled, or from your own cash reserves if you have this available. Once this money is in the account, it is effectively treated the same as monies paid into an Isa in previous years.This means that you can transfer it to any one or more providers that accept Isa transfers.

Virgin Money is currently offering one of the best easy-access rates available (Defined Access Isa Issue 2, 1.51% tax-free).

If you are looking for a fixed-rate Isa, you can earn 1.75% for one year with Holmesdale Building Society, Shawbrook Bank or Julian Hodge Bank, 2% for two years with Virgin Money, 2.30% with Leeds Building Society for three years, or 2.55% with Julian Hodge Bank for five years.

If you have not yet set up either the Isa with Nationwide or the Isa Saver (for APS) with Santander, you should visit a branch to ask for their assistance with setting up and using the APS allowance, before transferring to your new provider.

Please note that if you close the account before you have paid in the full APS allowance, then any unused allowance will be lost.

It is also worth remembering that the FSCS limit will reduce to £75,000 from 1 January 2016, although the new rules do allow some added protection for temporary high balances up to £1 million in cases such as inheritance, for six months after the account is first credited.


Anna Bowes is a founder and director at Savings Champion.