Banks told to be clearer on ISA savings terms

Financial service institutions that provide cash ISAs to their customers have recently been instructed to cease attempts to roadblock reforms that will facilitate savers discovering if their interest rate is low enough to switch to a better account.

The Treasury’s Financial Secretary Mark Hoban recently informed building societies and banks in the UK that their aim should be to match the average transfer time for savers that change insurance providers or transfer credit card balances.

Mr Hoban also insisted that banks include interest rates on customers’ bank statements immediately.

The entire industry, which makes more than £275 billion annually, neesd to be more customer-friendly, flexible, and competitive, the Financial Secretary added.

Industry experts have received several thousand complaints in regards to poor performance of building societies and banks when it comes to transferring ISA balances.  While the ideal amount of time for a transfer is viewed as 30 days or less, several instances of transfers taking up to six months have occurred.

UK banks have promised to institute a new 15-day deadline starting in the new year, but it is not clear if this will be calendar days or only working days.  Mr Hoban has been insistent that banks cut this to a much more reasonable amount of time, in addition to exhorting banks to speed up their planned 2012 deadline for including interest rates on ISA bank statements.

In a statement given to the Tax Incentivised Savings Association, Mr Hoban remarked that one absolute fundamental thing that savers are entitled to know in regards to the details of their accounts is how much they’re earning in interest.  The Financial Secretary also stated his incredulity at the fact that many savers face uphill struggles to discover what should be a clear and easily accessible piece of information regarding the status of their own accounts.

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