Isa transfer process speeded up

Pound coinsMore than nine out of 10 cash Isa transfers are completed within 15 working days, the trading watchdog said, after stepping in to speed up the process.

New industry guidelines have made it easier for consumers to switch deals, following a super-complaint by Consumer Focus about "poor and bureaucratic" transfer processes made to the Office of Fair Trading (OFT).
It typically took just over 26 calendar days to transfer a cash Isa between 2008 and 2010, and a quarter of transfers took longer than 30 days, an OFT investigation found two years ago.

But the OFT's latest review found that 93% of cash Isa transfers last year were made within the new timeframe, which was cut to 15 working days from 23.

Of the 7% of transfers that were delayed, the review suggested some could be due to a lack of staff cover for summer holidays and called for Isa providers to "plan ahead".

The watchdog said providers have also increased transparency over their interest rates by publishing them on Isa statements. It found that if transfer delays do occur, guidelines requiring the new provider to backdate interest are being followed.

The latest review was published to coincide with Isa switching season, with more than 40% of cash Isa transfers last year taking place in April, May and June.

Around £192 billion was saved in cash Isa accounts in the UK by April last year, the OFT review said.

But the efficiency of cash Isa transfers relies on how well the providers work together as customers cannot take the money out themselves without losing the tax advantage.

Consumer Focus had warned that account holders could be losing billions of pounds in interest due to poor transfer processes and said providers must be more up-front in giving basic information such as interest rates, especially on older accounts.

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