ISA transfer warning

Savers are being warned one in six ISA accounts do not allow transfers in – including two of the five current best buys.

As the April 5th ISA deadline approaches, savers could also be facing trouble transferring funds out from their current providers.

Research by Abbey shows one in 11 ISAs have strings attached for those transferring cash out of the account, including 30 days' notice, administration fees and set £25 charges.

Reza Attar-Zadeh, Abbey director of savings and investments, said: "With the average transfer balance of ISAs at £12,000, savers need to look carefully at the transfer conditions on cash mini ISAs.

"By not allowing transfers in, customers cannot benefit from a leading rate and are restricted to the tax-free benefits to just £3,000 this year, and £3,600 next."

He added: "More strange is the myriad conditions on transferring out. Savers could end up paying to transfer out their money, or are subject to time locks."

Despite the confusion over charges, Brits are encouraged to make sure they make use of the tax advantages of ISAs.

Figures from Nationwide show 62 per cent pf people do not have an ISA, with misunderstandings over the savings accounts turning people off them.

"It's a concern two thirds of people do not have an ISA," said Matthew Carter, director for savings at Nationwide.

"ISAs were introduced ten years ago and yet some people still do not understand them or feel they haven't enough money to invest in them.

"We want people to understand anyone can take advantage of tax-efficient savings, no matter how much money they have to save. It's also important to inform would-be savers, worried that their money is tied up, that all ISAs are instant access."