The Daily Telegraph - Saturday - Money
‘Why won’t Post Office let me move my £20,000 Isa?’
Cash Isa savers could unknowingly lock their money up with one provider if they take out more than one deal with them, experts have warned.
Portfolio cash Isa accounts allow savers to split their annual allowance between different deals with the same provider – for example, between a fixed-rate and an easy-access account.
Deals taken out under this umbrella are viewed as the same account by providers, potentially leading to restrictive withdrawal and transfer conditions, sometimes even if the deals are taken out in different tax years.
One saver, who did not want to be named, could not transfer £ 20,608 from a matured Post Office fixed-term Isa to another provider, as she had a second fixed-term Isa with the Post Office, not set to mature until next year.
As both deals were part of a portfolio account umbrella, taking money from one would be deemed a “partial transfer”, even though each account was opened in a different year and had a separate account number, maturity date and interest rate.
She was given the options of leaving her money in the Isa, opening a new Isa with the Post Office, or transferring the
funds from both her deals and paying a fee of £358.
The saver claimed she was not made aware of this condition when she took the products out, which the Post Office disputed. She said: “The Post Office website is not clear in any way of such a term. Such an unfair condition, locking a saver’s money beyond maturity, [it] should be clearly stated at the top of the relevant web page.”
A Post Office spokesman said: “The customer agrees to the Isa’s terms and conditions upon opening, which are available on the Post Office website, in the product summary box and in the key information pack which are provided to the customer.”
However, James Daley, of consumer group Fairer Finance, said providers should take extra steps to ensure customers are aware of these terms.
Mr Daley said: “It’s incumbent on providers to prominently draw any onerous terms to customers’ attention.
“The Post Office’s terms should have been clearly highlighted in the customer journey – not just in an accompanying document. I’d advise the reader to take her case to the Ombudsman, where I imagine she would have a good chance of success.”
The Post Office is not the only provider to offer portfolio Isa deals. Paragon Bank, Nationwide, Charter Savings and AA Savings all offer similar products, with varying terms for withdrawals and transfers.
Katie Brain of Defaqto, a ratings service, said: “It is very important to check the terms and conditions before applying, especially for these particular types of portfolio account.”