Fixed isa ending and won’t transfer in time

Dallybally

Hi. Sorry if this has been asked, I searched for fix ending and got about 1000 hits mostly on mortgages though. 

I’ve got a 1 year fix isa ending next Friday. I want to transfer to a new company but it won’t transfer in time. The current company does not offer normal isa’s, only fixed. What will happen to my money when the fix ends? I’ve asked them but they take days to reply. I presume it will sit in some rubbish holding isa or something with almost no interest, I’m just worried they’ll pay it out to my linked account and I’ll lose the tax free status. 

Cheers. 

Ayr_Rage

You need to read the original Ts and Cs to see the options on maturity or what happens if you do nothing,

All the times I have been in your situation the options are either emailed or come by letter and there will be a latest date to make your choice.

They will not let your funds leave the ISA wrapper and the most likely outcome is they will transfer your money into their lowest paying Instant Access ISA.

Dallybally

Thanks. They don’t have an instant ISA, only fixed, that’s what worries me. Guess if I transfer to that I’ll only lose a few days interest when it transfers out. 

happybagger

You need to give more info, like who the company is. I would guess (and that's all it is) that the terms for your account may say if they don't hear anything they'll reinvest in one of a similar term, and may say you have a number of days to change your mind.

As above, check the maturity details in your t&cs

refluxer

When cash ISAs mature and you haven't previously submitted maturity instructions, they normally default to a special  'maturity' or easy access ISA (with a derisory rate) but, in some rare cases, the funds are automatically transferred into another fixed rate cash ISA with a similar duration.

Your current provider should have already written to you to explain your maturity options, so make sure you check your emails and online banking messages (if appropriate) and some providers (particularly building societies) still like to post letters. 

If you don't have any maturity correspondence and can't get in touch with your provider, then you must check the T&Cs for the current ISA, especially if you want to avoid the risk of it being automatically transferred into another fixed rate account with the same provider.

What bank or building society is this ?

Dallybally

Thanks all. It’s UBL. They mailed me options but it doesn’t say what happens if I do nothing. Will check Ts and Cs of current. 

refluxer

From the FAQs for UBL's current fixed rate cash ISAs here...

What happens to my ISA at the end of the term / maturity?

As per our Personal Banking Terms and Conditions, we will write to you at least fourteen (14) days before your Cash ISA matures to ask for your instructions with respect to what you would like to do with your Cash ISA money at maturity. Upon maturity, you may: 1)      Re-invest your funds with UBL UK. 2)      Transfer your funds to another ISA Provider. 3)      Close your ISA and have your funds returned to a nominated account. You can send us your instructions via secure message,  or by post to the following address: FREEPOST: RUEE-STYR-XYKE, UBL UK, 2 Brook Street, London W1S 1BQ. If you do not provide us with instructions before the Maturity Date or if we cannot reasonably comply with your instructions on the Maturity Date, we will automatically rollover your Cash ISA into a Cash ISA, which is either identical or reasonably similar to your matured Cash ISA. The interest rate applicable to the new Cash ISA account will be at the prevailing interest rates offered by UBL UK at that time

Albermarle

refluxer said:

From the FAQs for UBL's current fixed rate cash ISAs here...

What happens to my ISA at the end of the term / maturity?

As per our Personal Banking Terms and Conditions, we will write to you at least fourteen (14) days before your Cash ISA matures to ask for your instructions with respect to what you would like to do with your Cash ISA money at maturity. Upon maturity, you may: 1)      Re-invest your funds with UBL UK. 2)      Transfer your funds to another ISA Provider. 3)      Close your ISA and have your funds returned to a nominated account. You can send us your instructions via secure message,  or by post to the following address: FREEPOST: RUEE-STYR-XYKE, UBL UK, 2 Brook Street, London W1S 1BQ. If you do not provide us with instructions before the Maturity Date or if we cannot reasonably comply with your instructions on the Maturity Date, we will automatically rollover your Cash ISA into a Cash ISA, which is either identical or reasonably similar to your matured Cash ISA. The interest rate applicable to the new Cash ISA account will be at the prevailing interest rates offered by UBL UK at that time

Just as a general comment, if they only contact you with 14 days left and you want to go with Option 2) then you had better be quick. If the new provider you choose is a bit slow organising the transfer, or either they or UBL make a mistake that delays things, then you could well find your self in a new One year fixed ISA with UBL.
There will probably be a 14 day cooling off period but could get messy unwinding the situation.
Especially as quote  I’ve asked them but they take days to reply

refluxer

From that FAQ answer I posted above - if your fixed rate ISA T&Cs are the same as for those they currently offer, then it looks like it will probably roll into another fix unless you tell them otherwise.

If they don't have an easy access/maturity ISA option and you're not able to arrange a transfer-out in time then I'm not sure what your options are at this stage, though.

But speaking of time.. as UBL appears to be a trading name of United National Bank Ltd who are on the list of providers who utilise the BACS ISA transfer service, then if you're able to open a new ISA with another bank who are also on that list and arrange a transfer without the need for paper forms, it's possible you might still have a chance of sorting a transfer in time. There are no guarantees though (I've had similar transfers take as little as a few days but others take much longer) and delays risk incurring a penalty if a transfer occurs after UBL have set a new fixed rate account up.

The 14 day cooling-off period may buy you some time beyond your maturity date, but I wouldn't want to rely on it as things could potentially get a bit messy going down that route (as Albermarle mentioned) and, as above, you risk incurring a penalty if making use of the cooling-off period hasn't been formally recognised (for whatever reason) and you end up being penalised for making an early withdrawal/transfer before maturity.

I've never held a fixed rate ISA where there wasn't an easy access option at maturity and have never made use of a cooling-off period for an ISA so have no experience of how any of this works in practise though, I'm afraid.

If you definitely want to avoid another UBL fix then it would be worth speaking to them about your options ASAP, I would imagine.

Dallybally

It does say if I change my mind on whatever I choose I have 14 days, so guess I have 14 days from next Friday for the transfer to go through, I’ve just posted the transfer form to new supplier, stupid place won’t even take email. Seems the best rate places skimp on fancy options. If it does end up in a fix I can still transfer can’t I? Worst case I lose X days interest, can they backdate that to before the new fix started and take money off me for what I already earned? 

refluxer

Dallybally said:

It does say if I change my mind on whatever I choose I have 14 days, so guess I have 14 days from next Friday for the transfer to go through, I’ve just posted the transfer form to new supplier, stupid place won’t even take email. Seems the best rate places skimp on fancy options. If it does end up in a fix I can still transfer can’t I? Worst case I lose X days interest, can they backdate that to before the new fix started and take money off me for what I already earned? 

Yes - withdrawals or transfers from a fixed rate ISA before maturity incur a penalty and if you withdraw within a period of time that is less than the penalty itself (eg. in less than 90 days for a UBL 1 year fix), then you will get back less than you put in.

What you need to be sure of is that any transfers-out occurring within the first 14 days would automatically be penalty-free as part of the cooling-off process, or whether UBL have to be formally notified that that is what you're doing. I've never done this myself so I don't know what the process is, but you need to be cautious and find out for sure to avoid any nasty surprises.