Wednesday, 31 March 2010

Isa savers ‘cheated of billions’ by banks

[Ed: Of course, one answer is the Stocks and Shares ISA, but as they say, the value of your investment can go down as well as up and they are not entirely tax free.]

A tax break created by Gordon Brown to encourage millions of people to save has degenerated into a £3 billion a year rip-off that enriches the banks, according to a damning verdict from the statutory consumer watchdog.

Consumer Focus has made a formal complaint to the Office of Fair Trading alleging that cash Isas pay derisory rates of interest and that banks use unfair obstacles to stop people from switching to better deals. The OFT has 90 days to respond.

“It beggars belief that in 21st century Britain it takes a month to transfer information and funds from one bank to another,” said Mike O’Connor, chief executive of Consumer Focus. “The average Isa saver is getting a poor deal.” Read more
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