Transfers to gain better ISA deals to be speeded up

Savers will be able to transfer their cash ISAs more quickly from next year to gain from better deals and earn bigger returns, the Office of Fair Trading (OFT) said.

The OFT said the time taken to transfer funds between ISA providers should be cut from 23 working days to 15 under new guidelines agreed with the industry.

Consumer watchdog Consumer Focus – which launched an OFT 'super-complaint' in March complaining of "poorer and bureaucratic processes" around ISA transfers – said savers could earn up to 14.5bn in extra interest as a result.

Hide Ad
Hide Ad

More than 17 million savers held 158bn in cash ISAs as of April last year. There will also be clearer information on interest rates – to be printed on the face of statements from early 2012 – although complaints by Consumer Focus about headline-grabbing bonus rates to lure in savers were thrown out.

The OFT said introductory rates were "not causing substantial harm" to consumers because potential savers were informed when the offer ends.

The new rules on transfers and transparency are voluntary, but the OFT recommends that the Financial Services Authority (FSA) look at tougher regulatory action if the industry fails to stick by the new timescales.

The OFT's senior director for services, Clive Maxwell, said: "Whilst there is often strong competition between providers in this market to win new savings, the transfer of cash ISAs is taking too long and there is not enough transparency over interest rates.

Hide Ad
Hide Ad

The voluntary changes announced today will give consumers a fairer deal and drive stronger competition."

Consumer Focus chief executive Mike O'Connor said: "We live in the age of keyboards, not quills. ISA transfers should take days not weeks, certainly not over a month.

"For competition to work for consumers, they need to be able to switch simply, quickly and with the right information."