Belfast Telegraph

Saturday 25 October 2014

Cutting through the red tape on ISA investments

The rules on ISA investments can be confusing for bank and building society customers

Question : I took out an ISA with Nationwide a few years ago. On its annual maturity, I have always reinvested it with Nationwide as it has generally offered a competitive rate.

It is currently a fixed-rate ISA of £3,833, which was opened on March 7, 2011. I've not paid into any other ISA in that tax year. I had another £2,000 to invest in March and saw Barclays offering a 3.25% ISA. When I went into the Newton Abbot Barclays branch I was told I couldn't open this ISA as I've already invested for this tax year. I said I thought the Nationwide one didn't count as it was reinvested money. She checked with a colleague and came back still saying no. I walked to nearby Nationwide and its staff said I could invest it. I went next door to Santander and saw it was offering a similar ISA to Barclay's. But the staff there also said I couldn't open a new ISA. So I withdrew the £2,000 and opened a new ISA with Nationwide. It seems some companies just don't want my money! SM

Answer: The rules on ISA investments can be confusing and your story shows the importance of clarity when explaining existing ISA investments to potential new ISA providers. Nationwide treated your £3,833 ISA as a continuing investment, which was rolled over on an annual basis. Therefore, as far as Nationwide was concerned, you were not using up your last year's ISA allowance when the money was "reinvested", as you put it.

However, both Barclays and Santander say that when you went into their branches you referred to the Nationwide ISA as having "matured" - as you did in your inquiry to us. That seemed to imply that the ISA had been closed and a new ISA opened. On that basis, Barclays and Santander declined to open a new ISA.

As of the new financial year, the annual ISA allowances are now total tax-free investments of up to £10,680, of which up to £5,340 can be saved in cash with one provider and the remainder invested in stocks and shares with either the same or a different provider. An existing ISA must be transferred - rather than closed and a new one opened - if you want to take advantage of a better ISA interest rate without using up the current year's ISA allowance.

Question: I have had various mortgage deals with the Halifax for over 25 years. My existing fixed-rate interest deal comes to an end in February 2012. I asked my branch how much would be outstanding then, so I can pay off the mortgage using funds I have in various one-year bonds. Before I can reinvest those monies, I need to know how much to put aside to pay off my mortgage. But Halifax says it cannot give me the figure in advance. MS

Answer: A spokesman for Halifax confirms that it is unable to provide a definitive amount. He says: "An exact figure is of course difficult to provide so far in advance. There are numerous variables that could potentially change the remaining amount before February 2012, whether it be potential fees or indeed overpayments, both of which would increase or decrease the final amount. Giving a figure would therefore be a little misleading, given that any estimate could be significantly different from the actual sum in February 2012."

However, Halifax accepts that it could have given you a more helpful explanation and an indication of what the amount was likely to be. Halifax therefore apologises, has now provided an estimate of the likely final balance and offers you a £25 goodwill gesture. It stresses that the final balance figure is only an estimate and "should not be used as a precise figure for redemption purposes".

Question: In 2004 I bought two DVD players for my children for Christmas. They were a Philips brand, purchased from Argos and very expensive - £200 - but I mislaid the receipt. Within two years of purchase one of the DVD players ceased to work and I contacted Philips on the website by filling in a form. I got no response, tried again and again got no response. Eventually Philips told me I would have to pay for a repair - at a cost of another £100. I located the receipt and wrote again to Philips. My letters were ignored. In late 2010 I spoke to a trading standards officer who told me that Philips should repair the DVD player or make a refund. I wrote to Philips again and then got a note to say that I should take the matter up with Argos. KT

Answer: We contacted Argos, which said that as the goods were bought such a long time ago it was not prepared to arrange a repair. We then contacted Philips, which agreed to replace the faulty DVD player in recognition of its failure to handle your initial complaint in a quick and efficient manner. Unfortunately, however, it was only when a replacement DVD standard player was delivered to your home that it became clear that you had bought portable DVD players. Philips has therefore now, in addition, sent you a free portable DVD player and allowed you to keep the previously dispatched DVD player.

A spokeswoman for Philips says: "The last contact we had with [the reader] was back in 2007 when the product was well out of warranty having been bought in 2004. As a gesture of goodwill we [have sent the reader] a new DVD player as a free replacement." This seems pretty generous to us. We assume you have received the second free DVD player.

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