ISA maturity uncertainty

doriangray23

Hello,

I'm a little confused:

I have an ISA (4.75%) which matured at the end of the day yesterday (6th Oct).

Yesterday, I applied for this to move to a new provider 'at maturity' as I was advised by the current provider to wait until the date and do this (although I have since realised I didn't need to wait). However, the existing provider automatically moves the ISA to another of their ISA products (around 3%) at maturity. There is a 21 day cooling off period.

The new provider advises that it could take up to 15 working days (=21 calendar days).

Since I selected the maturity option in the application, will the new provider (with whom I have other products inc. mortgage and current account) know that I meant the maturity of the original account (4.75%) or if I meant the maturity of the account the existing provider has since moved the money to?

If for any reason there is a delay, does this lock me in at 3% or would they charge me a penalty for withdrawing after 21 days?

wmb194

doriangray23 said:

Hello,

I'm a little confused:

I have an ISA (4.75%) which matured at the end of the day yesterday (6th Oct).

Yesterday, I applied for this to move to a new provider 'at maturity' as I was advised by the current provider to wait until the date and do this (although I have since realised I didn't need to wait). However, the existing provider automatically moves the ISA to another of their ISA products (around 3%) at maturity. There is a 21 day cooling off period.

The new provider advises that it could take up to 15 working days (=21 calendar days).

Since I selected the maturity option in the application, will the new provider (with whom I have other products inc. mortgage and current account) know that I meant the maturity of the original account (4.75%) or if I meant the maturity of the account the existing provider has since moved the money to?

If for any reason there is a delay, does this lock me in at 3% or would they charge me a penalty for withdrawing after 21 days?

What are the terms of the maturity account? Usually they mature into instant access accounts.

doriangray23

wmb194 said:

doriangray23 said:

Hello,

I'm a little confused:

I have an ISA (4.75%) which matured at the end of the day yesterday (6th Oct).

Yesterday, I applied for this to move to a new provider 'at maturity' as I was advised by the current provider to wait until the date and do this (although I have since realised I didn't need to wait). However, the existing provider automatically moves the ISA to another of their ISA products (around 3%) at maturity. There is a 21 day cooling off period.

The new provider advises that it could take up to 15 working days (=21 calendar days).

Since I selected the maturity option in the application, will the new provider (with whom I have other products inc. mortgage and current account) know that I meant the maturity of the original account (4.75%) or if I meant the maturity of the account the existing provider has since moved the money to?

If for any reason there is a delay, does this lock me in at 3% or would they charge me a penalty for withdrawing after 21 days?

What are the terms of the maturity account? Usually they mature into instant access accounts.

This is maturing into a 12 month fixed rate ISA with a 21 day cooling off period, I was told I had to use the cooling off period iff I want to move my money to another provider.

wmb194

doriangray23 said:

wmb194 said:

doriangray23 said:

Hello,

I'm a little confused:

I have an ISA (4.75%) which matured at the end of the day yesterday (6th Oct).

Yesterday, I applied for this to move to a new provider 'at maturity' as I was advised by the current provider to wait until the date and do this (although I have since realised I didn't need to wait). However, the existing provider automatically moves the ISA to another of their ISA products (around 3%) at maturity. There is a 21 day cooling off period.

The new provider advises that it could take up to 15 working days (=21 calendar days).

Since I selected the maturity option in the application, will the new provider (with whom I have other products inc. mortgage and current account) know that I meant the maturity of the original account (4.75%) or if I meant the maturity of the account the existing provider has since moved the money to?

If for any reason there is a delay, does this lock me in at 3% or would they charge me a penalty for withdrawing after 21 days?

What are the terms of the maturity account? Usually they mature into instant access accounts.

This is maturing into a 12 month fixed rate ISA with a 21 day cooling off period, I was told I had to use the cooling off period iff I want to move my money to another provider.

If available, use the cooling off period to convert it into an easy access Isa and then transfer that?

refluxer

Are you able to arrange a new transfer within that cooling-off period or is the only option to withdraw the funds yourself ?

Withdrawing and paying that money in to the new ISA you've just opened yourself will count towards your annual £20k ISA limit, which is something you'd normally want to avoid. If you've already used up your allowance this tax year, then you won't be able to pay any of it back into the ISA system until the next tax year. Even if the annual allowance isn't an issue for you, you'd need to be 100% sure that withdrawing would avoid a penalty, as that would be disastrous at this stage.

The advice to wait until the day of maturity to open the new ISA and arrange the transfer was poor, IMO. There's no guarantee that the transfer request will be read and actioned by the new provider on the day you submit it, so if the existing ISA then matures into another fixed rate product in the meantime and you requested the 'on maturity' option on the transfer request for the new provider, then that would presumably apply to the newly-opened, default fix. In this scenario though, the request would be rejected because you can't request transfers a year or more in advance (plus the account number may be wrong anyway) 

The normal procedure in this type of situation is to either open the new ISA and submit the transfer request a week or two in advance (if there is no easy access maturity option for the current ISA then this ensures that the originating provider has instructions for what to do in advance of when it matures) or, if there is an easy access ISA maturity option (either by default or request) then you arrange the transfer to the new provider after maturity (this also avoids any account number issues).

BTW - a 3% fix is shameful. Who is the provider ? The lowest fixed rate cash ISA currently listed on Moneyfacts is currently 3.25% and you have to scroll past 247 other accounts to get to it !

Kim_13

Is this the Skipton 18 month fix by any chance? They do morph the account into a fix of a similar duration, contrary to what is usual with most providers.

Not my ISA, but I recently helped with the process and an internal transfer was instructed through the Base Rate Tracker ISA the funds will be going to, to be processed at maturity. So far so good and it should go through overnight. You don’t have to wait until maturity to schedule a transfer for maturity, but as other users have found to their cost, it is not enough to wait until the ISA is within transfer timescales of the maturity date and say as soon as possible - they ended up with a penalty as it went through sooner rather than taking the full time that a transfer can take.

Anyway, as you now have the morphed fix, I would expect a transfer scheduled for maturity to fail based on the maturity date being too far in the future. I would then be minded to contact Skipton and ask them to, under the cooling off period, move you to an Easy Access ISA instead from where you can then transfer as you wish. This would guard against delays and being stuck with the account you have at the moment.

I would be nervous about simply resubmitting the request to the new provider and asking for straight away, as the cooling off period may be a manual process and the system take a penalty anyway. You’d have grounds to expect it to be reimbursed, since you were within a cooling off period, but trying to get it isn’t a headache that I would want.

fuzzzzy

Kim_13 said:

Is this the Skipton 18 month fix by any chance? They do morph the account into a fix of a similar duration, contrary to what is usual with most providers.

Just made a mental note never to open a fixed rate ISA with Skipton. There is always the potential for ISA transfers to go wrong and having an ISA mature into a fixed rate product is just too much stress to handle.

If it is Skipton though they do have the base rate tracker ISA tracking 0.16% above the BoE base rate so I would transfer to that for now.

Kim_13

refluxer said:

BTW - a 3% fix is shameful. Who is the provider ? The lowest fixed rate cash ISA currently listed on Moneyfacts is currently 3.25% and you have to scroll past 247 other accounts to get to it !

Fairly sure it’s Skipton, due to having sight of family member’s paperwork when they asked for help. Their 1 year fixed ISA for new applicants is paying 3.8%, so its similar to Kent Reliance whose default refixes were lower than those available on their website (and Kent’s paperwork turned up at the 11th hour by snail mail so some may not receive it and be able to return it before it has rolled over anyway.)

I also felt the 1 year default was sharp practice anyway, as their terms said a fix of a similar duration to the one originally chosen. 18 months is not available but 15 months is and was when the paperwork came, and 18 months is more similar to 15 months than 12. But of course 15 months pays more, so they wouldn’t want to do that…

doriangray23

wmb194 said:

doriangray23 said:

wmb194 said:

doriangray23 said:

Hello,

I'm a little confused:

I have an ISA (4.75%) which matured at the end of the day yesterday (6th Oct).

Yesterday, I applied for this to move to a new provider 'at maturity' as I was advised by the current provider to wait until the date and do this (although I have since realised I didn't need to wait). However, the existing provider automatically moves the ISA to another of their ISA products (around 3%) at maturity. There is a 21 day cooling off period.

The new provider advises that it could take up to 15 working days (=21 calendar days).

Since I selected the maturity option in the application, will the new provider (with whom I have other products inc. mortgage and current account) know that I meant the maturity of the original account (4.75%) or if I meant the maturity of the account the existing provider has since moved the money to?

If for any reason there is a delay, does this lock me in at 3% or would they charge me a penalty for withdrawing after 21 days?

What are the terms of the maturity account? Usually they mature into instant access accounts.

This is maturing into a 12 month fixed rate ISA with a 21 day cooling off period, I was told I had to use the cooling off period iff I want to move my money to another provider.

If available, use the cooling off period to convert it into an easy access Isa and then transfer that?

That would have been such a sensible option...

Okay, I wrote that while in a phone queue with my new provider, who've said the same thing (with the added step of having to cancel the oustanding application, unless I retain the same account number). I'll bear this in mind in future!

doriangray23

Kim_13 said:

Is this the Skipton 18 month fix by any chance? They do morph the account into a fix of a similar duration, contrary to what is usual with most providers.

Not my ISA, but I recently helped with the process and an internal transfer was instructed through the Base Rate Tracker ISA the funds will be going to, to be processed at maturity. So far so good and it should go through overnight. You don’t have to wait until maturity to schedule a transfer for maturity, but as other users have found to their cost, it is not enough to wait until the ISA is within transfer timescales of the maturity date and say as soon as possible - they ended up with a penalty as it went through sooner rather than taking the full time that a transfer can take.

Anyway, as you now have the morphed fix, I would expect a transfer scheduled for maturity to fail based on the maturity date being too far in the future. I would then be minded to contact Skipton and ask them to, under the cooling off period, move you to an Easy Access ISA instead from where you can then transfer as you wish. This would guard against delays and being stuck with the account you have at the moment.

I would be nervous about simply resubmitting the request to the new provider and asking for straight away, as the cooling off period may be a manual process and the system take a penalty anyway. You’d have grounds to expect it to be reimbursed, since you were within a cooling off period, but trying to get it isn’t a headache that I would want.

It is indeed Skipton. I've been looking forward to and dreading the end of this 18 months since the start because there were issues then too...

But yes, next point of action is moving to instant access.

Thank you!