Beware unusual transfer activity says Abbey

As the Tevez saga is finally resolved and he makes his debut for Manchester United, football is not the only area where conditions are attached to transfers. Abbey is warning people to watch out for restrictive transfer conditions when choosing a new ISA provider.

Abbey’s research shows that one in five ISA accounts do not allow transfers in. These include four out of five “leading “ accounts, with high market rates.

Furthermore, one in 11 accounts have strings attached to transferring money out, raising the possibility of people being hit by further charges or restrictive conditions. Catches include: -

Up to 30 days notice required
An interest penalty on the amount transferred
An administration fee for the amount transferred
Fixed charge for transfers

These restrictive conditions could impact people’s ability to switch to make the most of their tax free allowance. All Abbey’s ISAs allow transfers in and transfers out of existing ISA balances. The average transfer balance of ISAs is £12,000.

Reza Attar-Zadeh, Head of Savings and Investments at Abbey, said: “With the average transfer balance of ISAs at £12,000, savers need to look carefully at the transfer conditions on cash mini ISAs. It is disappointing that many of the leading rate cash ISAs do not allow transfers in – thereby restricting the tax-free benefits of ISA investing to just £3,000.

“More strange is the myriad conditions on transferring out. Savers could end up paying to transfer out their money, or subject to time locks. As we’ve seen in football, restrictive transfer conditions can be expensive and cause delays.

“There have never been more attractive rates for cash ISA investors. Abbey’s Direct ISA, for example, currently offers rates up to 6.11 AER per cent, while our Super ISA – available when you invest the same amount into an Abbey Guaranteed Growth Plan – offers 8.10 per cent.

“We urge savers to fully use their ISA allowance to ensure they minimise their tax bill.”

Customers can apply for an Abbey ISA account either by popping into their local branch, telephoning the customer sales line on 0800 234 6065 or by visiting abbey.com.