FSCS restriction

pennylonglane

Put my accumulated old ISA funds into a Yorkshire Bank 40 day notice ISA and have had a letter advising me that it now exceeds the new compensation limit. Looking to move some of it to another provider but can't overcome this 40 day notice problem. New provider will only keep their new account open 30 days and the Yorkshire will only accept notice if given a sort code and account number by the new provider. Neither of them will budge. Any ideas how to move this cash to relative safety without losing ISA status please?

eskbanker

Could you perhaps go via an S&S ISA as a temporary measure, or even a permanent one if you implicitly have over £75K in cash form?

bubieyehyeh

Or open a instant access isa but don't put any new money in, do a isa tranfer to new instant isa account, and when complete open the isa you really want and give them the instant isa details to transfer from.

colsten

I believe no bank is allowed to penalise savers if they wish to withdraw/transfer up to £10K because they savings account exceeds £75K, provided you make/request that move before 31/12/2015.

You could contact the PRA if YB won't let you withdraw without penalty.

[STRIKE]http://www.bankofengland.co.uk/publications/Pages/news/2015/056.aspx[/STRIKE]


EDIT: scrap that link, this one is what you want:
http://www.bankofengland.co.uk/publications/Pages/news/2015/065.aspx

eskbanker

colsten wrote: »

I believe no bank is allowed to penalise savers if they wish to withdraw/transfer up to £10K because they savings account exceeds £75K, provided you make/request that move before 31/12/2015.

You could contact the PRA if YB won't let you withdraw without penalty.

[STRIKE]http://www.bankofengland.co.uk/publications/Pages/news/2015/056.aspx[/STRIKE]


EDIT: scrap that link, this one is what you want:
http://www.bankofengland.co.uk/publications/Pages/news/2015/065.aspx

Arguably YB will let OP withdraw without penalty before the limit reduction is imposed - that document only seems to mandate that institutions "will need to return funds to depositors within two months of the request or by 31 January 2016 – whichever is the earlier date", so YB could argue that continuing to insist on 40 days notice is actually compliant with that directive.

I understood the PRA intervention to be aimed more at overriding the Ts & Cs of longer duration fixed term accounts where withdrawals otherwise wouldn't have been possible at all (or would have incurred penalties) before the new FSCS limit came in, but personally I think it's debatable to construe a requirement to (continue to) give 40 days notice as a penalty as such, even if in this specific case it would appear to cause some inconvenience.

pennylonglane

I already have current year's ISA limit invested so can't open a new funded ISA this year, if that's what you mean. Tried a S&S ISA for a change but it's not doing very well!

pennylonglane

Thanks, I'm going to write to the PRA for clarification. Worth a try.

masonic

I think the best way around this has already been suggested...

bubieyehyeh wrote: »

Or open a instant access isa but don't put any new money in, do a isa tranfer to new instant isa account, and when complete open the isa you really want and give them the instant isa details to transfer from.

A partial transfer to their own instant access ISA, followed by a full transfer to a new provider.

NickyJ71

Hi. Please bear with me.....never made a comment before and I'm not very techy! So this first one is just a test to make sure I'm doing it right!


Oh, well that seemed to work OK.


Anyway I just wanted to say that I'm in a similar situation to pennylonglane.


Just trying to set up a normal ISA transfer from YB to the Coventry without incurring a penalty. As mentioned, YB request 40 day notice but the Coventry will only accept within 30 days (apparently this is "industry standard"). After various calls and emails the Coventry have tried to assure me that it is possible by giving YB their 40 day notice, using my Coventry ISA account bank details on the form, then after 10 days have lapsed, contact the Coventry to initiate the ISA transfer with YB?


Sounds like a recipe for disaster to me and I'm not willing to take the risk of them duplicating the transaction. So it seems the only way is to suffer a charge or leave my cash in the YB. Lucky YB!


Also the transfer "out" form does not seem to be available to download. It looks like you have to go into a branch.....not very convenient. I'm not sure if you can request one on the phone....probably not.


I'm beginning to regret opening this ISA with the YB. I certainly won't be putting any more funds in the account.


If anyone has any advice/suggestions, I'd be very grateful!

masonic

NickyJ71 wrote: »

If anyone has any advice/suggestions, I'd be very grateful!

I have done numerous cash ISA transfers (back in the days when it made sense to put money in a cash ISA) and every transfer form I encountered permitted a transfer date to be stated, or included a statement instructing the existing ISA provider to wait for the full notice period before sending funds.

The 30 days "industry standard" quoted at you is not only out of date (it is now 15 days), but it does not include any notice period or time up a specified transfer date.

It is also no longer a recognised practice to submit a transfer form to the existing ISA provider when trying to initiate a transfer, so don't let them persuade you to do that.

Please point out to Coventry that they are not complying with HMRC best practice if they do not allow you to instruct the existing ISA provider to serve the relevant notice period before transferring the funds. If you want to quote chapter and verse at them, refer them to the HMRC ISA Guidance Notes, clause 11.15c and the contents of Appendix B.

NickyJ71

Thank you masonic, interesting comments.....I will definitely be putting them into use. Much appreciated.