How banks are TRAPPING customers on lower savings rates as they ignore new ISA rules
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SAVERS are being trapped on lower rates as banks and building societies ignore new ISA rules, The Sun can reveal. Individual savings accounts (ISAs) offer tax-free savings on up to £20,000 a year. You do not pay tax on any money within an ISA, regardless of how much interest you earn.
There are different types of ISAs, such as fixed or variable and each have different uses and merits. Before April 2024, savers were banned from opening two ISAs of the same type in the same tax year. However, new rules introduced by HMRC allow savers to open more than one type of ISA with either the same bank or different banks.
Now nine months later, The Sun can reveal only six savings providers allow customers to open multiple ISAs with them. These providers are Aldermore, Nationwide, Paragon, Santander, Skipton Building Society, and Zopa. But, major providers such as Barclays, HSBC, Lloyds Bank, and NatWest continue to deny their customers this option.
Customers can still open an ISA with a different provider but the extra effort that comes with this could discourage them from saving more money. Consumer champion Martyn James said: "It's incredibly disappointing to see from The Sun's research that the main financial institutions have failed to prepare and introduce these new changes.
"This is a major concern to me, especially given that more and more people are risking everything on dodgy, unregulated investment options like cryptocurrencies in a desperate bid to make some money. "We need to help people make their money work for them, not fail to introduce basic, simple changes that would make our money go further.".
