Chancellor 'should introduce 7-day limit on ISA transfers'

Tuesday, 22 June 2010 11:56

By myfinances.co.uk staff

Chancellor George Osborne has been urged to support savers in his Budget today by introducing a seven-day limit for ISA transfers.

Comparison site moneysupermarket.com said this would bring the rules governing the switching of the funds between banks into line with regulations already covering the transfer of current accounts.

It argued that ISA savers currently miss out on millions of pounds in interest every year because providers "drag their feet" over moving them on to new deals, with the process taking up to a month in some cases.

According to its figures, if just ten per cent of the UK's 18 million cash ISA investors transferred their accounts annually, a delay of a single day would cost £576,000 in lost growth.

The site's head of banking Kevin Mountford said there is "no real excuse" for transfers to take more than seven days, given that most switches involve a few mouse clicks.

"It wouldn't cost the government anything to implement this suggestion but would help the 18 million ISA savers in the UK," he added.

The annual tax-free limit for a cash ISA was increased in April to £5,100.

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