Santander 'stole' my ISA allowance

Headly

Here's an interesting dilemma.

I recently opened a 2-year cash ISA with Santander with an initial deposit of £1000 (my total ISA investment so far this tax year).

A month later, I have some spare cash and want to make a further deposit into my new ISA. However, Santander say I cannot, because the terms of this particular ISA account stipulate that no further deposits may be made beyond 14 days after opening the account.

So, whilst I technically still have an ISA savings allowance of £4649 to be used in the current year, Santander won't let me put it into my new account with them, and the statutory regulations only allow you to subscribe to one new ISA in each year.

Does this really mean that I've lost my entitlement to save the balance of my ISA allowance for this year?

If so, that doesn't seem at all fair to me.

Is there anything I can do?

Gareth19

Headly wrote: »

Here's an interesting dilemma.

I recently opened a 2-year cash ISA with Santander with an initial deposit of £1000 (my total ISA investment so far this tax year).

A month later, I have some spare cash and want to make a further deposit into my new ISA. However, Santander say I cannot, because the terms of this particular ISA account stipulate that no further deposits may be made beyond 14 days after opening the account.

So, whilst I technically still have an ISA savings allowance of £4649 to be used in the current year, Santander won't let me put it into my new account with them, and the statutory regulations only allow you to subscribe to one new ISA in each year.

Does this really mean that I've lost my entitlement to save the balance of my ISA allowance for this year?

If so, that doesn't seem at all fair to me.

Is there anything I can do?

Some ISA's you will notice (especially fixed ones) will say no further deposits allowed. This should be pointed out to you though in the literature one would presume

Headly

Correct. And I admit I didn't spot that when I opened the account.

However, that's irrelevant in principle, because the legislation is in place to limit the government's tax-free allowances for ISA savings; it's NOT there to make it impossible for an individual to legitimately save up to their personal allowance in a tax year.

Hence there really ought to be a mechanism to overcome such an anomaly. If there isn't, I've lost 10 months worth of tax free interest on £4640 just because of a Santander T&C in the small print.

That's unjust.

Lokolo

You didn't read the terms of the account and it's their fault?

The ISA rules do say that providers are allowed to have the allowance split over multiple accounts if with the same provider. However they are not obliged to allow this.

Headly

Okay, I sense I'm going to get flamed here for asking a simple question and pointing out the principle behind the regulations.

No, I'm not saying it's anybody's fault (note the quotes in the title).

What I am saying is that the ISA rules are there for a reason, and in my situation they don't serve their intended purpose. In fact they unfairly discriminate against an individual simply because of a particular ISA's terms and conditions. It was never intended that the latter should have any bearing whatsoever on the former.

I just wanted to be certain that there wasn't a workaround for this particular situation.
If there isn't, c'est la vie - one lives, and one learns.

Cheers

le_loup

There is a work around. Pay the rest into a different ISA account but still with Santander.
Most providers allow one years investment to be spread over multiple accounts.

mgarl10024

I don't know, but I was wondering that if you closed the account (and had your money back) whether that ISA still counts as the one you have 'subscribed' (paid money into) this year. I expect it would which doesn't help - but someone more knowledgeable may know better.

innovate

Headly wrote: »

No, I'm not saying it's anybody's fault (note the quotes in the title).

Actually, I would say it is someone's fault - - yours. You bought a product that doesn't suit your requirements. Some cheek to accuse the product provider of "stealing" when they at no time were hiding any of the product features from you!

Headly wrote: »

In fact they unfairly discriminate against an individual simply because of a particular ISA's terms and conditions.

I am sorry but this is utter rubbish. There is no discrimination of any sorts. Nobody put a gun to your head and made you buy that particular ISA. Instead of chosing another of the several dozen ISAs on offer in the market (one of them even at Santander) that meet your requirements, you chose one that wasn't suitable for you.

You might be able to get out of the hole you dug for yourself if one of the suggestions from other posters work. But I would suggest you humbly ask whether Santander can help you, rather than accusing them of 'theft' and discrimination.

NB. I do not work for Santander and am not a Santander shareholder.

bigfreddiel

Headly wrote: »

What I am saying is that the ISA rules are there for a reason,

the fact you cannot pay into the ISA you opened isn't an ISA rule - its the providers rule.

fj

psychic_teabag

mgarl10024 wrote: »

I don't know, but I was wondering that if you closed the account (and had your money back) whether that ISA still counts as the one you have 'subscribed' (paid money into) this year. I expect it would which doesn't help - but someone more knowledgeable may know better.

I don't think that would work : the account you closed is the only one you are allowed to pay into. However, you should be able to transfer it to an instant-access ISA (probably paying an early-access penalty) and then continue paying into that.

Well, I guess you could close it and use the cash to open a new one under the "self transfer" rule. http://en.wikipedia.org/wiki/Individual_Savings_Account#Transfer_rules

Headly

Innovate,

Thanks for your constructive input.

Have a nice life. If you have one.

Headly