Tax & Accounting News

New guidelines set to speed up ISA transfers

12/07/2010

Savers with cash ISAs should be able to switch providers more quickly, and be given more information about the interest rate they are receiving, after the Office of Fair Trading (OFT) issued new guidelines to providers.

This followed a ‘super complaint’ to the OFT by the Consumer Focus watchdog, which found that it took an average of 26 days to move an ISA between providers, with a quarter taking over 30 days, and just one in ten being switched in less than two weeks.

Many customers also received no interest from either their old or new provider during a two to five day period during the changeover.

After a three-month investigation, the OFT has revised its guidelines on how long ISA transfers should take, from 23 to 15 working days, with the changes coming into effect on 31 December 2010.

The OFT has also agreed with the ISA industry that current interest rates should be clearly stated on the front of cash ISA statements from 2012. At present, only around 15 per cent of customers are informed of their rates in this way.

Customer Focus has estimated that speeding up transfers could deliver savers up to £14.5million a year in additional interest payments, while the watchdog also hopes that making customers more aware of the interest rate they are receiving will encourage more of them to move away from poorly-paying accounts.