Industry experts have stated that personal and business bank account providers could shave a week or more off the regulated 15 working day ISA transfer period if they would only adopt new technologies.
Campaign body Consumer Focus has stated that delays in ISA transfers can cost savers more than £3 billion every year thanks to losses related to tracking the new account’s interest rate. The providers of these ISAs get their pockets lined quite nicely as a result, Consumer Focus added.
Banks are less concerned with helping their ISA customers than they are with their own bottom lines, commented former bank director James Clark. Mr Clark stated that financial services providers have the requisite technology to enable quicker ISA transfers – they simply won’t use it.
The former bank director stated that there is no good reason why ISA transfers can’t be completed in two days. Instead banks will instead use an antiquated non-electronic system and the Royal Mail.
Around 1.5 million savers transfer their ISAs to take advantage of a better rate annually. The traditional high-water mark for such transfers is the end of the tax-year in April as savers seek to take full advantage of their annual ISA allowances.
However the UK’s sluggish system has been frustrating savers for years. It has been commonplace for savers to experience substantial delays which can sometimes last months.
Last year the Office of Fair Trading had had quite enough, and thanks to a new ruling all ISA transfers must be completed in 15 working days or less. Savers could resultantly stand to earn as much as £14.5 billion in previously lost interest.
However sceptics point out that the new limit is not so terribly significant an improvement over the old one. 15 working days is simply nine days sooner than the old 30 calendar day maximum, many have pointed out. Moreover an Office of Fair Trade investigation found that one out of every four transfers last year went over the previous limit anyway.