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Natwest Messed up my ISA
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The 30 day guideline referred to is for the old ISA provider to respond to the new provider's request for the funds.
There is no such guideline for the new provider - it is normally assumed that they want the money and will therefore process things quickly.
Natwest have been awful recently with average one month processing delays before requesting funds - and then even longer to bank the cheques after they receive them.
Quoting the 30 days is a red herring - they should process things efficiently and are responsible for the whole delay, less the time from the day they write to your old provider to the day they receive the cheque.0 -
Strikes me that NatWest could get into trouble if they tried to claim that a transfer that actually took place in one tax year took place in a previous year. Sounds like they are embarrassed. Have you spoken to the girl who said they would backdate?0
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They can't backdate unless they made a mistake - but in this case, it appears that they did.
HMRC are very flexible if it is the provider's error, and not flexible at all if it's the customer's error.0 -
I thought I was the only one until I read these messages. I had exactly the same problem. I even opened a savings account with Natwest just so that I could open a 08/09 cash ISA. They've put the £3600 in a 09/10 ISA - which I didn't apply for! They've offered me 1 year's interest as compo which I've turned down and I am now putting together representation to the Financial Ombudsman. They've told me they won't make a better offer.0
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1 year's interest is quite a ridiculously generous offer, if that's really what you mean.
The likely tax savings you have lost are the interest rate, multiplied by your marginal tax rate, multiplied by the time ISAs continue for.
At interest rates of around 3.5%, even at a marginal tax rate of 40%, you would need about 77 years to gain that amount.
In other words, the offer is far better than FOS will give you. Why on earth do you think FOS will give you more?0 -
Unless I'm missing something (and assuming basic rate tax), 20% will be deducted from the interest on the £3600 per year, meaning one years interest will cover just under 5 years worth of tax after compounding. This also assumes an average rate of 3.5%, and that taxed savings accounts have similar rates.MarkyMarkD wrote: »1 year's interest is quite a ridiculously generous offer, if that's really what you mean.
The likely tax savings you have lost are the interest rate, multiplied by your marginal tax rate, multiplied by the time ISAs continue for.
At interest rates of around 3.5%, even at a marginal tax rate of 40%, you would need about 77 years to gain that amount.
In other words, the offer is far better than FOS will give you. Why on earth do you think FOS will give you more?
A: 1 years interest = £126 (one off payment)
B: Basic rate tax on 1 years interest = £25.20 (lost every year through loss of the ISA wrapper)
It won't take long for B to catch up to A
Presuming notwest was planning to use the full ISA allowance each year and continue to do so for some time, 1 years interest doesn't seem very generous.
Edit: For example, using the figures above, a basic rate taxpayer holding £3600 in a taxed savings account for 40 years at 3.5% would pay over £1000 in tax, even before compounding was taken into account. Losing a £3600 tax free allowance can be very costly.0 -
It's too late for natwest's tax unit to amend your subscription so it looks like it's from 08/09. SorryI thought I was the only one until I read these messages. I had exactly the same problem. I even opened a savings account with Natwest just so that I could open a 08/09 cash ISA. They've put the £3600 in a 09/10 ISA - which I didn't apply for! They've offered me 1 year's interest as compo which I've turned down and I am now putting together representation to the Financial Ombudsman. They've told me they won't make a better offer.Kavanne
Nuns! Nuns! Reverse!
'I do my job, do you do yours?'0 -
Masonic, you are quite right and I was talking out of my hat! :dunce:0
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This interesting. They seem to do this deliberately?
In Dec. 08 I opened an ISA with NatWest, paying the annual 08/09 allowance and requested the transfer of my existing ISA for A&L. The rate then was 3.5%.
In April I received a first statement. The money from A&L was no-where. It took several branch visits, calls and letters until finally by the end of June I received a letter confirming that the ISA was transferred AND that I was credited with the interest rate on the amount transferred from A&L backdated to Dec. However, I was just told that the interest I earn from now on includes the bonus rate of 1.76%.
I don't remember that the 3.5% rate in December included any bonus. Also the current cash ISA rate of NatWest has now dropped to 0.95%? I am rather annoyed. Should I try and find yet another account?
Max0 -
There is no gain for them to do this deliberately. It just seems that by offering a competitive product, they have bitten off more than they can chew. Their processing centres don't seem to be able to deal with the high volume of work, resulting in many errors and delays.This interesting. They seem to do this deliberately?
<snip>
I don't remember that the 3.5% rate in December included any bonus. Also the current cash ISA rate of NatWest has now dropped to 0.95%? I am rather annoyed. Should I try and find yet another account?
Max
It will certainly be worth transferring now that your rate has dropped so low. Unfortunately, that means you will have to go through another painful transfer involving Natwest, but it is something you would have to do sooner or later anyway.0
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