Chancellor George Osborne is expected to deliver one of the harshest and most controversial budgets in history tomorrow, with UK taxpayers expected to feel the pain of increased taxes as the government looks to deal with the deficit.
However, the Chancellor is being urged to help the 18 million ISA savers who are potentially losing out on vital interest as banks drag their feet moving them to better deals by moneysupermarket.com.
Introducing
ISA transfer codes and implementing new rules that give banks a maximum of 7-days to switch customers who are looking for a better deal would save a collective £500 million in lost interest for every day knocked off the switching process, says the comparison site.
moneysupermarket.com says there are currently are no strict timescales in which banks and building societies have to adhere to when switching customers on to new ISA deals. Although the process should be relatively straight forward, many banks take far too long to do this, in some cases well over a month.
"In the days when the banking system largely relied on paper to perform tasks you expected things to take a little time,” said Kevin Mountford, head of banking at
moneysupermarket.com.
“However, in the electronic age, there is no real excuse to take longer than 7-days to transfer ISAs from one bank to another. We have seen many customers disadvantaged by lengthy and unacceptable delays in switching ISAs, and for each day a transfer is delayed, it costs the customer in lost interest. If you are a saver who relies on interest income then you need to maximise this return as every penny counts.
"moneysupermarket.com would like to see the coalition government take up this proposal which should help speed up the switching process, which is currently fraught with problems. It wouldn't cost the Government anything to implement this suggestion but would help the 18 million ISA savers in the UK.
“We already have 7-day switching for current accounts and this process has made switching relatively easy, even with the process of moving direct debits. The faster payments system also makes the moving of funds immediate.
“We also see faster switching in other industries such as with mobile phones so it is time banks and building societies adopted an approach that fits the 21st Century.
"We’re all expecting to feel out of pocket following the budget so anything that gives us a little benefit would be welcomed."
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