Alliance and Leicester charge £25 to transfer ISA

Jollydonna · 29 October 2004 at 8:14PM

>:( My Alliance and Leicester fixed rate ISA has just matured, and their follow- on rates are not competitive so I want to transfer to another provider.

A &L will charge me £25 if I want to do this. This applies to all their ISA's. I wasn't told about this when I took out the ISA last October 2003, although they said they had written to all their customers in August 2003.

So if you don't want to pay them this scandalous charge, then you have to stay with their indifferent rates, or cash in the ISA and loose your £3000 interest free cash allowance.

Does anyone know how many other providers use this
way of trying to keep their customers? Has anyone else fallen foul of this practice.

Obvioulsy when one takes out any ISA this is a question to ask before parting with your money, and allowing a provider to handle your valuable ISA allowance

Your comments please.

dunstonh · 29 October 2004 at 8:45PM

This is not an uncommon fee.

isasmurf · 29 October 2004 at 9:06PM

You were told about this. It's in the terms and conditions.

Always read the small print.

li-sue · 3 November 2004 at 2:35AM

Hi, Jollydonna

I found out about this charge when I tried to move my ISA which was originally taken out in 1999, I also did not receive this change in conditions letter.

A&L came back with the £25 charge. My original ISA was taken out under the Government CAT Standards.

This they have also removed and to add insult they say as the account hasn't ben used for some time it is now frozen and therefore NO INTEREST has been added for the last two years.

This on an initial investment of £3000 means that the total funds in the account are short by £275 over the investment period.

You can guess that I am somewhat bemused by the actions of A&L and would think like many other investors that as you have put money away to save and have it TAX FREE that it would not be made 'dormant' .

Anyone out there with any other views on this subject it perhaps will be the same with other Companies / Banks .

MarkyMarkD · 3 November 2004 at 9:25PM

This they have also removed and to add insult they say as the account hasn't ben used for some time it is now frozen and therefore NO INTEREST has been added for the last two years.

This on an initial investment of £3000 means that the total funds in the account are short by £275 over the investment period.

When your account is made dormant by a bank or building society (which is done for your own protection, incidentally), interest will often stop being credited to the account.

But this is a temporary thing.

Once the account is made live again, everything will be updated putting you back in the situation as if it was never made dormant.

Banks and building societies do not make accounts dormant without writing to warn you. If you ignored those letters, or didn't receive them because you moved and failed to notify them, then your account might be made dormant without your knowledge. But it isn't their intentional design to do so.

sly_dog_jonah · 4 November 2004 at 3:19PM

I have moved ISAs between Portman BS, Smile, LloydsTSB and Marks & Spencers without ever being charged.

Cheers for the heads up though, obviously A&L ISAs are to be avoided!

deemy2004 · 4 November 2004 at 5:43PM

Hi, Jollydonna

This they have also removed and to add insult they say as the account hasn't ben used for some time it is now frozen and therefore NO INTEREST has been added for the last two years.

This on an initial investment of £3000 means that the total funds in the account are short by £275 over the investment period.

You can guess that I am somewhat bemused by the actions of A&L and would think like many other investors that as you have put money away to save and have it TAX FREE that it would not be made 'dormant' .

Anyone out there with any other views on this subject it perhaps will be the same with other Companies / Banks .

I don't get it ?

You opened a Alliance and Liecester cash isa, and they are not adding interest annually ?

I've have had Furness ISA's for several years without adding a penny to them, still get and expect annual interest.

Okay the account goes dormant, if their letters are bouncing back to them for several years, thus have you moved house and not informed them ? Have you infact had any correspondance with them with regards your account ?

Did you not recieve annual interest statements, usually in April each year ?

8)

deemy2004 · 4 November 2004 at 6:16PM

>:( My Alliance and Leicester fixed rate ISA has just matured, and their follow- on rates are not competitive so I want to transfer to another provider.

A &L will charge me £25 if I want to do this. This applies to all their ISA's. I wasn't told about this when I took out the ISA last October 2003, although they said they had written to all their customers in August 2003.

Your comments please.

I would rather pay £25 then give 90days notice as I had to with Furness !! The interest lost there would have been £38 on £3k, and more so on larger ISA account.

Still I was aware of the 90day notice so cannot complain.

Robert_Sterling_3 · 4 November 2004 at 7:01PM

author=Jollydonna link=board=ISAs;num=1099066443;start=0#0 date=10/29/04
allowing a provider to handle your valuable ISA allowance
Your comments please.

Your Valuable ISA Allownce is not all that valuable.
Interest on 3000 is tax free
At 5% interest on 3000 is £150
The tax saved is 20% of £150 which is £30
This is not big potatoes
But if A&L then charge you £25 to move it this wipes out 83% of your £30 tax exemption money.
Wot a Chiz!
It is all in the Terms and conditions I expect.
Terms & conditions should be read,

MarkyMarkD · 4 November 2004 at 10:00PM

Robert is correct if you leave the money in the ISA for just one year. But that isn't the way most people behave.

If you intend to "rate tart" your ISA funds, you obviously shouldn't choose an account which charges a withdrawal penalty.

Alliance and Leicester charge £25 to transfer ISA

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