Cash ISAs are currently offering some mouth watering rates of interest.
Small wonder, then, that canny savers are transferring previous years’ ISAs into better paying accounts in droves - thanks to attractive rates and the facility to consolidate previous years’ ISAs into one account.
While not all cash ISAs allow transfers-in, some do and where the rate is competitive it is usally a good idea to do so.
But many banks and building societies have been overwhelmed by transfer business, leading to administrative delays, loss of clients’ interest and even lost cheques.
Transfers from one provider to another are supposed to take no longer than 30 days under current Revenue rules. But in practice, it is often takes far longer.
The 30 day rule relates to the amount of time that your old Cash ISA provider has to transfer the relevant funds to a new provider - not total turnaround time from application to the opening of the new account.
Delays partly stem from the fact that most providers still send the money to the new provider by cheque - not only is this slow, but it provides ample scope for mistakes to occur.
Abbey, Bradford & Bingley and Nationwide are known to have had difficulty coping with application backlogs, leading to Nationwide temporarily stopping all new transfer business.
The Financial Ombudsman Service has reported an upsurge in complaints from clients about loss of interest due to delays or the cancellation of a better rate.
Financial services companies are required to ‘treat customers fairly’ and are expected by the Financial Services Authority to deal with formal written complaints within eight weeks.
If your complaint remains unresolved after that time, you can lodge a complaint with the Financial Ombudsman Service.
But not all providers are bad. I recently transferred my cash ISA, with the whole exercise taking just 10 days.
www.financial-ombudsman.org.uk or call 0845 080 1800
Take a look at the Top 10 ISAs:
http://www.defaqto.com/consumer/savings-accounts/cash-isas.aspx
Comments
Trackbacks