Savers get savvier as ISA switching soars

A record number of ISA savers are intending to switch providers to get a better rate, according to new ICM research commissioned by Intelligent Finance.

7% of people who have taken out an ISA in the last few years - almost 900,000 savers - intend to transfer provider in the next year. This is almost four times the number of people who intended to switch in 2004 (2%).

A further 7% of those who have opened an account in the last few years say they have already switched from their original provider, more than double the number of switchers in 2004 (3%).

ISA awareness increasing

More people than ever before are aware that they can switch ISA providers. When questioned, four in five people were aware they could switch, which is a 5% increase from the previous year.

Older and wiser

When it comes to ISA switchers, those approaching retirement are savvier than any other age group. More than twice as many 55-64yr olds plan to switch providers this year (16%), compared to the national average (7%).

Commenting, Mark Parker, Managing Director, Intelligent Finance said: “An ISA provider is not necessarily for life, and the message that you can move your money is getting through to savers. Better still, increasing numbers are voting with their feet and moving their money elsewhere to get a better deal. To get a consistently competitive offering, an ISA with a guaranteed rate ensures peace of mind regardless of changing interest rates.

" In addition to this, with Intelligent Finance your ISA can also be used to offset your mortgage and help drive down the amount of interest you pay."

Guaranteed Consistency

Since introducing its mini cash ISA guarantee in 2003, Intelligent Finance has consistently paid new and existing customers at least Bank of England base rate or above. ISA savers currently receive 5.35% AER/Gross from £1. This is 0.10% above Intelligent Finance's rate guarantee, which promises to pay at least Bank of England base rate until 31st December 2007.

Intelligent Finance's ISA remains one of the top ten direct mini-cash ISAs in the marketplace and gives customers a number of other benefits:

Every customer gets the best rate on offer - Intelligent Finance pays the same great rate from £1.

There are no hidden notice periods - customers don't face any penalties for looking to withdraw their money when they need it

Offset option available - Savers can choose not to receive interest on their ISA balance, and pay no interest on the equivalent amount of their offset mortgage. In doing so they could reduce the amount of interest they pay on their mortgage.