A&L ISA Con?

caltaff

I was listening to money box at noon today on radio 4 and can't quite believe what I thought I heard; so I thought I'd check it out with you guys. They said the A&L ISA paid a tasty rate of 5.40% but that the catch was that if the rate became uncompetitive and you wished to switch, they charged a flat rate of £25!!! :eek: . I really hope I misheard this as I have just switched to them from IF and I did not see anywhere in their literature mention of the penalty. I even checked their website today and could not see anything about this £25 stinger. Has anyone any knowledge of this please? :mad:

deemy2004

Its in the T&C ... Yes they charge £25 for transfers.

£25 on £3k is equivalent to 0.8%.

But the bigger problem is the lack of effiency in transfering OUT ! They CAN take upwards of 3 months !

So A&L are pretty much a crap ISA provider.

caltaff

That stinks!!! The only reason I went with them was because Abbey took 3 months to process my original transfer and in the end lost my file documents, so I simply gave up on them. This charge must be in very small print in the T & C but I'm going back in for another look. They should make their charges and penalties much clearer I think.

MarkyMarkD

As deemy says it is in the Ts & Cs and I've previously posted a link to it on their website, but here it is again:

http://www.alliance-leicester.co.uk/savings/index.asp?page=direct-isa-userguide&ct=savingsmenu

Two clicks from the homepage - Quick Links to Direct ISA, then Direct ISA User Guide.

Section headed:

How can I transfer my Direct ISA funds to an ISA with another provider?

includes the sentence

There will be a charge for this service. See our Tariff for Additional Services

which links to

http://www.alliance-leicester.co.uk/savings/onlinesavertariff2.pdf (PDF file - slow download especially on dial-up) which in turn states the charge of £25.

The A&L Direct ISA is not a sensible account for rate chasing customers - it's only worthwhile if you intend to leave the money in there for a fair length of time - in which case, you probably aren't reading this thread!

grumbler

MarkyMarkD wrote:

The A&L Direct ISA is not a sensible account for rate chasing customers - it's only worthwhile if you intend to leave the money in there for a fair length of time - in which case, you probably aren't reading this thread!

Or if you have far more than £3000 to invest (transfer) - in which case you probably (also) aren't reading this thread!

newfoundglory

Yes, A&L will catch a lot of people out with this. I checked for this charge in the T&C when the account was first available, since they apply it to their normal cash ISA - and sure enough they charge it on this account too!

As far as I can tell, this high paying ISA is only suitable for exising A&L branch cash ISA customers, or those who want to take the risk that A&L rates will remain competitive - those who are stuck with A&L currently in the low-paying branch ISA, and who don't want to pay £25 to get out can move to the Direct ISA for free...

blinko

this is a very malicious move and it just shows how little banks value their customers, i dont think i would be wrong in thinking that the average saver on the high street isnt fully aware of the penalities and when they transfer or try to transfer it they will be very disappointed !!

lipidicman

10/10 to moneybox for highlighting this! I've been banging on about it whenever I can since it launched

Al_Mac wrote:

I'm working on the assumption they daren't cut rates, as they'll miss lots of business.

But once they have the business, ie after the mad last minute rush - they can do just that and people will be tied in.

Exit penalty = 'we need to trap you as we might cut our rates!'

If the rates stay high you dont need a penalty, people wont need to transfer

To the original poster: Abbey and then A&L - wow, what bad luck. I'm going to try halifax direct at 5.15% (they tend to maintain rates and have no penalties)

steveb1967

I have just opened an A&L mini-cash ISA, whoops.
what would happen if I just withdraw all the money then close the account, then open a First Direct ISA from April?
any help and I would be very greatfull.

many thanks
steve b

grumbler

steveb1967 wrote:

what would happen if I just withdraw all the money then close the account, then open a First Direct ISA from April?

It is O.K.
However if you are planning to add another £3000 to ISA next year, you will loose this opportunity (part or full) because you cannot invest more than £3000 into cash ISA during a financial year.
Is their anything it T&C about 'cooling off' period? May be you still can change your mind and open some other ISA (any one without ties and transfer charge)? You do not have a lot of time left though.

cjanderson

I took one of these out, transferred 12k from IF to here. So if the rate becomes rubbish down the line, the £25 is only 0.2% rate change to make it worth moving

So does work for people with a lot of cash in there

Shall 05/06 go for the first direct cash isa and move it over come October.