Avoid NS&I – no Faster Payments means fewer (if any) Transfer options

kbrazzill

NS&I cannot do faster payments and, in current (COVID) situation many other providers won’t accept cheques. Because of this it's almost impossible to transfer their Direct ISA to another provider. How rubbish is that!

I’m thinking that my only option is to withdraw funds from NS&I (it is for this financial year) and simply start again with another provider. Not 100% sure that this is allowed, so maybe I should just abandon the idea of an ISA this year.  Unless anyone knows of an suitable banking home that will accept transfers by cheque?

refluxer

I've transferred both a CTF and an ISA in recent months and don't remember reading about restrictions on how the transfer would be carried out, either on the website or in the new product T&Cs. I've no idea whether they were actually transferred electronically or by cheque but I do know that signed forms had to be exchanged between both companies by post for both transfers so as these transfers weren't exclusively electronic, it's possible cheques could have been involved, I guess ? 

What makes you so sure that providers won't accept ISA transfers by cheque ? As far as I've read, balance transfers by cheque between providers are still quite common.

eskbanker

kbrazzill said:

NS&I cannot do faster payments and, in current (COVID) situation many other providers won’t accept cheques. Because of this it's almost impossible to transfer their Direct ISA to another provider. How rubbish fictional is that!

Fixed that for you.

NS&I does use Faster Payments, which is why they commit to sub-£50K withdrawals from most of their products (including Direct ISA) reaching customers' banks on the next working day.  If you claim to have been told by an ISA provider that they can't accept an ISA transfer from NS&I, feel free to name them and share details of exactly what was said....

Alexland

Although NS&I might offer Faster Payments on withdrawals they seem to use cheques or unsigned warrants when transfering ISA see message from HL at the top of this thread where they were told that NS&I would not do BACS / Faster Payments for an ISA transfer.

https://forums.moneysavingexpert.com/discussion/6210177/ns-i-incompetence/p1

Thrugelmir

Setting up one off payees is both time consuming and costly. Hence why cheques are still used.  Far more efficient process. Less chance of the money going astray. There's more to administration than simply the speed of transfer. 

kbrazzill

eskbanker said:

kbrazzill said:

NS&I cannot do faster payments and, in current (COVID) situation many other providers won’t accept cheques. Because of this it's almost impossible to transfer their Direct ISA to another provider. How rubbish fictional is that!

Fixed that for you.

NS&I does use Faster Payments, which is why they commit to sub-£50K withdrawals from most of their products (including Direct ISA) reaching customers' banks on the next working day.  If you claim to have been told by an ISA provider that they can't accept an ISA transfer from NS&I, feel free to name them and share details of exactly what was said....

Response from Shawbrook Bank: "At present, we are not receiving funds from NS&I for any of our customers.  
This is due to NS&I not being able to send funds via Faster Payment, and due to the current situation, we are not in the office to process cheques.  If you wish, we can store your ISA transfer in form until we are able to receive funds from NS&I, however at present there is no time frame for when that may be."

masonic

kbrazzill said:

eskbanker said:

kbrazzill said:

NS&I cannot do faster payments and, in current (COVID) situation many other providers won’t accept cheques. Because of this it's almost impossible to transfer their Direct ISA to another provider. How rubbish fictional is that!

Fixed that for you.

NS&I does use Faster Payments, which is why they commit to sub-£50K withdrawals from most of their products (including Direct ISA) reaching customers' banks on the next working day.  If you claim to have been told by an ISA provider that they can't accept an ISA transfer from NS&I, feel free to name them and share details of exactly what was said....

Response from Shawbrook Bank: "At present, we are not receiving funds from NS&I for any of our customers.  
This is due to NS&I not being able to send funds via Faster Payment, and due to the current situation, we are not in the office to process cheques.  If you wish, we can store your ISA transfer in form until we are able to receive funds from NS&I, however at present there is no time frame for when that may be."

The response from Shawbrook is incorrect. NS&I is able to send funds via Faster Payment, just not for ISA transfers. I've received funds from NS&I via Faster Payment, as recently as last week.

Seems a bit rubbish that Shawbrook is unable to process cheques at all. I've made 3 ISA transfers this year, all of which have involved cheques because the sending providers did not support electronic ISA transfers.

As a workaround you could transfer the ISA to a proper bank, and then onward to Shawbrook. It is a fairly safe bet that any of the big high street banks will both accept a cheque-based transfer in and support an electronic transfer out. You could confirm your choice with Shawbrook before going ahead.

DavidT67

So just to clarify;

Shawbrook Bank is a 'proper' bank with FSCS protection and a license , whereas NS&I aren't, they're an outsourced Govt dept.

Neither are directly connected to the Faster Payments System; they both rely on intermediaries.

masonic

DavidT67 said:

So just to clarify;

Shawbrook Bank is a 'proper' bank with FSCS protection and a license , whereas NS&I aren't, they're an outsourced Govt dept.

Just to clarify, by 'proper bank', I mean a bank that offers a full range of banking services, such as the provision of current accounts. No such bank could get away with saying that they cannot process cheques and that there is no time frame for when they might start doing so again.

DavidT67 said:

Neither are directly connected to the Faster Payments System; they both rely on intermediaries.

This is true, but not relevant to the ability to process ISA transfers electronically using Faster Payments. Many ISA providers are not Direct Participants but can still transfer ISAs electronically using Faster Payments.

It's worth remembering that at last count there were 560 authorised ISA managers in the UK, so that's 313,000 combinations of two ISA managers who might be called upon to process an ISA transfer. There is no single unified electronic transfer system, so even providers that are capable of transferring electronically may fall back to a paper-based system including a cheque if their electronic systems are not compatible. But if a provider can offer electronic transfers, it is fairly well assured that there is at least one other ISA manager who has a compatible system, so it is just a case of identifying one such manager who can also fall back to paper+cheque, and performing a two-step transfer as suggested.

RetSol

I had a similar difficulty a couple of months ago but the problem was that the transferor ISA provider could not issue a cheque (their normal method of transfer) "because of Covid".  This led to a lengthy delay while the parties sought a way of communicating bank details securely. In the end, for unrelated reasons, I abandoned the transfer. As far as I know, the transferee, Paragon, would have had no difficulty in receiving a cheque. The way things are at present, if you want to make an ISA transfer, I strongly recommend finding out in advance what process the parties use and whether they are readily compatible with each other.  I have successfully made a couple of other ISA transfers, without any dramas, since March but that was where the whole process seems to have been completed electronically. 

isasmurf

kbrazzill said:

eskbanker said:

kbrazzill said:

NS&I cannot do faster payments and, in current (COVID) situation many other providers won’t accept cheques. Because of this it's almost impossible to transfer their Direct ISA to another provider. How rubbish fictional is that!

Fixed that for you.

NS&I does use Faster Payments, which is why they commit to sub-£50K withdrawals from most of their products (including Direct ISA) reaching customers' banks on the next working day.  If you claim to have been told by an ISA provider that they can't accept an ISA transfer from NS&I, feel free to name them and share details of exactly what was said....

Response from Shawbrook Bank: "At present, we are not receiving funds from NS&I for any of our customers.  
This is due to NS&I not being able to send funds via Faster Payment, and due to the current situation, we are not in the office to process cheques.  If you wish, we can store your ISA transfer in form until we are able to receive funds from NS&I, however at present there is no time frame for when that may be."

It has probably more to do with whether or not NS&I are participants in the BACS Cash ISA transfer system. As this is the only means to transfer cash ISAs electronically if either the sending or receiving institution is not a participant then the whole ISA transfer process has to be done manually by sending cheques and paper forms in the post.