Banks and building societies have made significant progress improving cash Isa transfers, according to the Office of Fair Trading (OFT).
More than 90% of cash Isa transfers carried out last year were completed within 15 working days, while providers are back-dating interest if the transfer is delayed beyond that deadline. They are also publishing interest rates on statements, after an OFT ruling forced providers to do so from 1 January 2011.
Improvements in cash Isa transfer times
The OFT’s report follows a 2010 Which? campaign on poor savings rates and a lack of transparency on statements, as well as a super complaint submitted by Consumer Focus, which found that savers were losing out due to poor and bureaucratic transfer processes.
An OFT investigation at the time found it took, on average, more than 26 days to transfer a cash Isa, with 25% taking longer than 30 days due to delays in administration and poorly completed or lost forms.
The savings industry committed to a number of improvements last year and the new OFT review has found they are widely being acted upon. An electronic transfer system for cash Isas is also expected to be available to BACS members later this year.
Cash Isa transfer improvements welcomed
The improvements have been welcomed by the British Bankers’ Association (BBA), the Building Societies Association (BSA) and the Tax Incentivised Savings Association (TISA).
Consumer Focus director of financial services Sarah Brooks said: ‘It is good news for savers that cash Isas seem to be working better since our super-complaint in 2010. At a time of relatively low rates, proactively switching is usually the only way to make sure your money is working as hard as it can.’
Switch to get a better savings and cash Isa deal
A new Which? investigation has this week revealed that UK savers could be losing out on almost £13bn in interest each year by failing to switch savings accounts. We are urging savers to switch to get a better deal.
Which? is also calling on the government to ensure that the new financial regulator, the Financial Conduct Authority, is a watchdog not a lapdog. We want a strong regulator that stands up to the banks, making sure that they offer consumers competitive savings products.