Alliance & Leicester minimum payment on ISA

msfender

My sister recently attempted to make a payment into her A&L ISA before the end of the last tax year. The other day she noticed that the payment had been returned to her bank account. When she contacted A&L she was told that the ISA had been deactivated because she had not made a payment into the account (a minimum of £1) in the past 2 years. A&L took 16 days after her payment to return the money and consequently she was unable to make arrangements to reactivate the ISA, (why does the making of a payment to the account not automatically do this?) or open another in time and missed the April deadline. Is this grounds for a complaint to A&L?

Baldur

ISA reactivation is a requirement for all Cash ISA accounts if you haven't subscribed for a full tax year, and requires the completion of a declaration.

See an example explanation HERE:

ISA Reactivation If you did not deposit any monies in your Cash ISA with the Society during the last tax year, or your account was previously a TESSA Only ISA, you can now deposit savings up to the £3,600 limit but you will be required to complete an ISA Reactivation Application Form.

Edit:

Note the wording on the Application form:

This reactivation form is required by HM Revenue & Customs only when subscribing to your (insert name of ISA provider) ISA when no subscription to that ISA has been made in the previous tax year.

msfender

Many thanks Baldur. Fair enough. I think perhaps notification to this effect and returning the money sooner than 16 days after payment may have been in order however.

Baldur

msfender wrote: »

.....returning the money sooner than 16 days after payment may have been in order.....

Totally agree.