Early withdrawal from cash ISA as per Martin - provider not allowing

phillw

AlanF said:

Hello everybody - original poster here - thanks for all the responses. I think the comment about wording was correct (although in my defence the wording in Martin's article was the same - to refer to withdrawal when actually he was talking about transferring out "Yet unlike normal fixes where you're locked in, fixed cash ISA rules mean you must be allowed to withdraw early - usually for an interest penalty" - so I have now found the T&C for the account, which does specify a 180 day penalty.
Many thanks for all the helpful comments. I won't name the provider as I acknowledge that I probably asked the wrong question!
Thanks again
Alan F

I believe you can withdraw as long as you withdraw the full amount.

eskbanker

AlanF said:

Hello everybody - original poster here - thanks for all the responses. I think the comment about wording was correct (although in my defence the wording in Martin's article was the same - to refer to withdrawal when actually he was talking about transferring out "Yet unlike normal fixes where you're locked in, fixed cash ISA rules mean you must be allowed to withdraw early - usually for an interest penalty" - so I have now found the T&C for the account, which does specify a 180 day penalty.
Many thanks for all the helpful comments. I won't name the provider as I acknowledge that I probably asked the wrong question!
Thanks again
Alan F

I'm a bit confused about exactly what you're trying to do and what you asked your ISA provider about?

If you asked about withdrawal, is your ISA provider resisting an attempt to withdraw funds, as per the quote in your post of their reply, in contravention of its own Ts & Cs and the ISA rules?

"We don’t usually accept early withdrawals unless there is an exceptional circumstance. If this is the case, then you will need to submit an early withdrawal request. This is either a letter or an email explaining why you need the funds early. These are then assessed on a case-by-case basis, and we may ask for proof. If it were to be accepted, we would send you any penalty that may apply."

On the other hand, if you're actually trying to transfer out, then you need to arrange this via your new ISA provider, not by contacting the existing one....

EssexHebridean

As I read it, what the OP meant to ask was the penalty for transferring out before the edge of the term, but he inadvertently asked what the penalty was for withdrawing before the end of the term. Simple case of using the wrong phrase, as he's acknowleded. 

masonic

Regardless of the wording of the question, the initial response received was incorrect and that is no fault of the OP. I'm not aware of any provider that has a different penalty for withdrawals vs transfers, so the question posed should have led to the correct answer of a penalty equivalent to 180 days interest. No provider can lawfully state of an ISA "We don’t usually accept early withdrawals unless there is an exceptional circumstance."

km1500

They can lawfully state they don't accept withdrawals what they can't lawfully state is they don't accept closure

masonic

km1500 said:

They can lawfully state they don't accept withdrawals what they can't lawfully state is they don't accept closure

Closure without a withdrawal is theft.

They can only refuse partial withdrawals. Same with transfers.

km1500

yes obviously closure implies payment of the whole outstanding balance plus interest less penalty

masonic

km1500 said:

yes obviously closure implies payment of the whole outstanding balance plus interest less penalty

It does therefore concern me that those who have an absolute right to withdraw all of their money for any reason via closure of their account may not be informed of this fact, and instead misled into thinking they have to write to the ISA manager requesting permission. Based on the OP's response, they would need to disclose details of their personal circumstances that might justify them as being worthy of being given their money back, possibly being asked for proof of their hardship, and then wait for their case to be judged. Most likely the OP's experience is just a one-off error, but if it wasn't, then I'd have serious misgivings about the institution in question.

AlanF

Thanks again, sorry, looks like I may have opened a can of worms! Essex Hebridean was correct - I wanted to transfer, not withdraw, the funds, and was indeed just asking about what any penalty might be for doing so. I was indeed aware that I arrange a transfer by contacting the new provider, not the existing one, but in order to make the decision whether or not to transfer, I needed to know what the penalties for so doing were!

km1500

The penalties (ie loss of x days of interest on closure or transfer) will be part of the T and C of your ISA.

What you do.is

1. apply for the new ISA and a transfer-in

2. tick the box saying 'transfer immediately accepting any penalties'

3. your old ISA provider will close your ISA, deduct the penalty and forward the rest to your new ISA manager