Can I transfer an ISA to a SIPP?

Government regulations don't allow you to transfer directly from an individual savings account to a self-invested personal pension (SIPP). The two are treated differently for tax purposes.

If you've considered the differences between stocks and shares ISAs and SIPPs, and would like to move money from an ISA to a SIPP, you'd need to take an amount from your ISA and then put it into your SIPP, rather than transferring directly. You should think about the tax benefits and allowances before doing this.

ISAs are tax efficient, and you may already have paid tax on the contributions you make to one. If this is the case, you wouldn't have to pay tax on it again. If you put this money into a SIPP, you can claim tax relief on pension contributions up to 100% of your relevant earnings or a £2,880 net contribution, whichever is higher. This effectively means the government is topping up your pension. 

This reinvestment can be advantageous if you expect to have a lower income in retirement and, for this reason, pay a lower rate of tax.

Bear in mind that the tax you pay will depend on your personal situation and and tax rules, which can change over time.

Before you consider moving money from an ISA to a SIPP, remember that there's no reason why you shouldn't have both - since each has its own benefits. ISAs have specific tax benefits and enable you to access your money before you reach any particular age.

If you do decide to move money from an ISA to a SIPP, you need to remember that you can't transfer directly. Whether it would still be beneficial to move money to a SIPP depends on your individual circumstances and needs. A SIPP is a longer term investment designed to provide an income in retirement, while investing in a stocks and shares ISA can be suitable for more medium term needs, not just retirement income. You may wish to talk to a financial adviser before making a decision.

What are the benefits of moving money from an ISA to a SIPP?

There are some advantages to moving your money into a SIPP, including:

• Tax relief on contributions. The amount you can contribute to a pension to qualify for tax relief in any particular tax year is currently 100% of your earnings or £3,600 - whichever is higher. So, even if you don't have any earnings, you can still pay in £3,600 into a pension in each tax year. There's also a limit on how much you can pay into all your pension schemes (from all sources including your employer) without paying a tax charge. This is called the annual allowance. For 2026/2027 the annual allowance is usually £60,000, but will depend on your personal tax circumstances. If you don't use all your allowance it may be possible to carry it forward into future tax years. Find more information about SIPP tax relief and allowances.
• Increased investment choices. SIPPs can give you more investment choices than ISAs, including commercial property and more complex investments. This might lead to better returns based on what you choose to invest in and how markets perform, but can also have a higher level of risk.

What are the risks of moving money from an ISA to a SIPP?

There are also a few things to watch out for if you're considering moving your money from an ISA to a SIPP, including:

• Later access to your money. If you move money into a SIPP, you won't normally be allowed to access it until you reach 55 (57 from 2028).
• UK income tax. While you get a tax relief when you put money into a SIPP and can usually withdraw up to 25% of it tax-free, you then have to pay UK income tax when you withdraw the rest of the pension. This isn't the case with ISAs, where withdrawals are tax-free.
• Contribution limits. You also need to watch out for the limits on how much you can put into your SIPP each year, which is usually £60,000 or 100% of your relevant earnings, whichever is lower. Going over this limit can lead to extra tax charges. You can't pay more than your earnings into an Aviva pension, because the excess wouldn't qualify for tax relief.
• Your ISA allowance. If you move money from an ISA you'd effectively lose your ISA allowance on that amount.
• Market risk. It's important to remember that, as with all investments, value of a SIPP can go down as well as up, and you may get back less than you invested. Values of investments are affected by charges and market conditions.

If you're thinking about moving money from a stocks and shares ISA. to a SIPP, here's what you should consider:

• How much do you want to take out of your ISA? Remember, some ISAs might charge you for taking out your money early, especially if it's a fixed-term ISA.
• Next, put the money you took out into your SIPP. Make sure the total amount you contribute, including this new amount, doesn't go over your annual allowance of £60,000 (subject to any carry forward relief you may have available) or 100% of your relevant earnings, whichever is lower.
• Make sure you make the most of tax relief. Basic rate tax relief goes into the scheme, along with your contribution. If you pay tax at a higher rate than that, you can claim the rest of your tax relief directly from HMRC, through your tax return.
• It's wise to talk to a financial adviser before you make these changes. They can help you understand the tax rules and make sure you're making the most of your money. This is important to avoid any mistakes that could cost you later.
• Think about any charges which may apply to the SIPP. These may differ from those you pay on an ISA.
• Before withdrawing from your ISA, it's crucial to check if there are any penalties or loss of interest benefits. Some ISAs, especially those that are fixed term or have specific conditions for higher returns, may penalise you for early withdrawals.

If you are considering moving money from an ISA to a pension, a SIPP could help you save for retirement with tax relief on eligible contributions and a range of investment options. 

While you can't transfer money directly from an ISA to an Aviva SIPP, you may be able to withdraw money from your ISA and contribute it to your pension, subject to contribution limits and eligibility for tax relief.