Answering your ISA questions

ISA season is here and we’ve gathered the most frequently asked questions from our members to help you make the most of your tax-free savings.

What is a Cash ISA and how does it work?

A Cash ISA is a savings account that allows you to earn tax-free interest. This means you won't have to pay UK income tax or capital gains tax on the interest you earn, as long as you don’t exceed your ISA allowance.

The Marsden provides two types of ISAs, these are Cash ISAs and Fixed Rate Cash ISAs. A Fixed Rate Cash ISA offers a guaranteed interest rate over a set period and funds are locked away for an agreed timeframe.

How much can I put in a Cash ISA?

For the 2025/2026 tax year, the Cash ISA allowance is £20,000; this remains the same for the 2026/2027 tax year. We’ve written another article to help you understand the Cash ISA allowance.

From 06 April 2027, the government will introduce a new £12,000 annual limit on Cash ISA contributions for savers under 65, a reduction from the current allowance of £20,000.

Although the overall ISA allowance will remain at £20,000, the remaining £8,000 must be placed into an investment product such as a Stocks and Shares ISA or Lifetime ISA. Savers aged 65 and over will keep the full £20,000 Cash ISA limit, creating a new, age-based system.

Can I have a Cash ISA and a Stocks and Shares ISA?

Yes, providing the total amount saved across all ISA types doesn’t exceed the annual £20,000 ISA allowance. Marsden Building Society doesn’t provide a Stocks and Shares ISA and would recommend consulting your current provider for more information.

Can I transfer between Cash ISAs?

When transferring a Cash ISA, you must request an official ‘ISA transfer’ to avoid losing the tax-free status of your savings. It may be possible to transfer used ISA allowances into a Marsden Building Society ISA, depending on the terms and conditions of the account. If you’d like to transfer your ISA funds to us, you can download an ISA Transfer form or contact your local branch to speak to our team.

Please note that different ISAs, such as Fixed Rate Cash ISAs or Stocks and Shares ISAs, may have different procedures. It’s recommended to contact both providers for clarification before proceeding.

What is the best Cash ISA?

We’ve written an article comparing our Cash ISAs and other savings account to help you find the best savings account for your current needs.

Can I withdraw from a Cash ISA?

Whether or not you can withdraw from a Cash ISA depends on the type of ISA you have and the provider you’re with. If you’re with the Marsden:

• For an easy access Branch Cash ISA, you can withdraw your funds whenever you need. However, notice accounts will require a set notice period before making a withdrawal, as per the terms of the account.
• If you have a Flexible Cash ISA, you have easy access to your funds and your remaining tax-free allowance will not be reduced with each withdrawal.
• With a Fixed Rate Cash ISA, partial withdrawals are not allowed during the fixed term. If you close the account before maturity, there will be an interest penalty.

Can you have a Lifetime ISA and a Cash ISA?

The Marsden doesn’t currently provide Lifetime ISAs, however typically you can only pay into one Lifetime ISA in a tax year. The maximum for this is currently £4,000.

Contact the Marsden

Our friendly savings teams are on hand to discuss your options and answer any queries you may have. Call or email us today. Alternatively, find and visit us in your local branch.