ISAs enter the 21st century… at last

ISA transfers - long the bane of savers around the country - are at last going electronic with some major providers.

Kevin Mountford, head of banking at independent comparison site moneysupermarket.com, said: "Cash ISA transfers have been the greatest source of savings pain on our forums.

"It is incredible in this day and age that these transfers have relied on posting cheques. No wonder the process has been rife with delays and complaints.

"Thankfully Lloyds Banking Group - with a quarter of the ISA market - plus fellow big players Abbey and the RBS Group have now bitten the bullet and entered the electronic world that applies to almost all other financial products.

"It is clear that last year's problems with ISA transfers led to much finger pointing towards banks and building societies to get their acts together.

"It is good to see some of the major players - including Halifax, Bank Of Scotland and NatWest - getting on board with this. Now we need all providers to make this a reality."

While people are only allowed to open one cash ISA per year, they can transfer the balance to another provider as often as they wish.

NatWest is set to be one of the early beneficiaries of this initiative - with its e-ISA account, which allows transfers in, paying 3.25 per cent.

Kevin Mountford continued: "At a time when so many savings rates are at rock bottom, every opportunity should be given to consumers to transfer their funds to ensure they get the best value for money. This certainly is a step in the right direction.

"Realistically, savers have until Saturday morning to squirrel away this year's cash ISA allowance of up to £3,600. And anyone planning to utilise next year's allowance can start putting money aside in their new ISA from Monday onwards.

"People who can afford to save but aren't using their ISA allowance are really missing out. The highest paying variable ISA at the moment is the Barclays Golden ISA at 3.61 per cent."