By Ben Simmons
A ‘super complaint’ levelled at financial institutions providing cash ISAs by the Office for Fair Trading, will make it easier for savers to transfer to more appealing packages, helping foster competition within the market.
The super complaint was levelled by the OFT following thousands of concerns voiced by consumers.
“It is good news for savers that cash ISAs seem to be working better since our super-complaint in 2010,” comments Sarah Brooks, director of financial services at Consumer Focus. “Armed with better information on rates and more confidence in transfer times, people will now find it easier to switch their ISA.
“Our advice would be for savers to check their rate and if they are not happy move their money. At a time of relatively low rates, proactively switching is usually the only way to make sure your money is working as hard as it can.
“It is unfortunate but loyalty rarely pays with ISAs and if consumers haven’t moved their savings for a while then they are unlikely to be getting the best returns. Shockingly interest levels of 0.5 per cent or lower are common. ISAs with initial bonus rates tend to perform best but savers should find out when it expires, as rates tend to plummet afterwards.”
In March 2010, Consumer Focus issued a super-complaint about the cash ISA market to the OFT after its research found that consumers were losing out massively due to poor and bureaucratic transfer processes used by the providers which inhibited switching. The consumer champion estimated that as a result cash ISA holders could be losing out on billions of pounds in lost interest. The super-complaint also criticized providers for making it difficult for consumers to find out basic information about their ISA such as its name or interest rate, especially on older accounts.
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