ISA accounts are not as flexible as they should be, according to research by Abbey.
Their found that one in five ISA accounts does not allow transfers in and that four of the five ‘best buys’ do not allow transfers in.
The research also revealed that one in 11 ISA accounts have transfer exit conditions, including things like a 30 days notice period, interest penalty on the amount transferred, admin fees on transfers and fixed charges.
Abbey says that these conditions could affect whether people can make the most of their tax free allowance.
Reza Attar-Zadeh, Head of Savings and Investments at Abbey, said: “With the average transfer balance of ISAs at £12,000, savers need to look carefully at the transfer conditions on cash mini ISAs.
“It is disappointing that many of the leading rate cash ISAs do not allow transfers in – thereby restricting the tax-free benefits of ISA investing to just £3,000.
“More strange is the myriad conditions on transferring out. Savers could end up paying to transfer out their money, or subject to time locks. As we’ve seen in football, restrictive transfer conditions can be expensive and cause delays.”
But, says Attar-Zadeh, there have never been more attractive rates for cash ISA investors, “Abbey’s Direct ISA, for example, currently offers rates up to 6.11 AER per cent, while our Super ISA – available when you invest the same amount into an Abbey Guaranteed Growth Plan – offers 8.10 per cent.
“We urge savers to fully use their ISA allowance to ensure they minimise their tax bill.”
Find out more about getting an Abbey ISA