A major shake-up to Isas this month was supposed to make them more attractive than ever.
The savings accounts already have the advantage of letting you earn tax-free interest on up to £20,000 each tax year. And under reforms brought in on April 6, they are supposed to be more flexible.
As Money Mail’s savings expert, I have spoken to all major savings providers to check how they are getting on with implementing the new rules. But it’s a dismal picture, as our table reveals.
None of the 16 major savings providers has implemented all these rules for their Isas. One big bank, Barclays, hasn’t made any of Government’s three major changes.
Gone are the days when savers needed to choose between an easy-access and a fixed-term Isa.
New rules: Isas already allow you to earn tax-free interest on up to £20,000 each tax year. But under recent reforms, they are now supposed to be more flexible
The latest HM Revenue & Customs rules mean you should be able to open as many as you like — as long as you don’t exceed your annual £20,000 limit.
The new rules allow Isa savers to hold more than one with the same provider — or with several. That’s the theory.
But, over a week since the new rules came in, no major bank allows you to open more than one Isa with them in a single tax year.
So, if you open an easy-access Isa with them and they later launch a great fixed-rate deal, you cannot take advantage.
Only Skipton Building Society, Nationwide, Paragon, Aldermore and Zopa offer this flexibility.
Several major providers do not let you open an Isa if you have already opened one with a rival this tax year.
Partial transfers are also allowed, so in theory you can move some of your cash if you spot a good deal and leave the rest where it is.
Of the 16 providers I spoke to, only Skipton Building Society allows partial transfers into its Isas.
And that’s of little use to anyone, since not a single provider allows partial transfers out. So, if you have put money into a cash Isa this tax year and want to move it to get a better deal, you must move the lot or none at all.
The new rules just apply to Isas in the current tax year — money from previous years can be moved into as many accounts with as many providers as you want.
Insiders tell me that even if savings providers wanted to offer Isa customers the new flexibility permitted by HM Revenue & Customs, they couldn’t — because they simply do not have the back-end technology to support it.
This suggests it could be months until savers fully benefit — and some providers may not bring in the changes at all.
Nonetheless, most reassure me they are working behind the scenes to do so.
Some providers already allow a combination of fixed-rate and easy-access Isas. That is because when they originally launched their Isas, they structured them so all Isa accounts count as one.
These providers are in a strong position now to allow savers to mix and match.
They include Charter Savings Bank with its Mix and Match Isa, Zopa (Smart Isa), Paragon (Isa Wallet), Nationwide (Portfolio Cash Isa), Newcastle Building Society (CustomIsa) and Aldermore (MaximISA).
Hargreaves Lansdown’s savings platform offers the same flexibility, except the accounts offered are from external savings providers.
Sadly, all this means savers need to do more homework to pick the best Isas. You will need to dive into the small print first.
This is a great shame. Isa savers were promised a huge shake up, and new changes that were announced last year to great fanfare.
But few will benefit — and savers will have to work harder to get the best deals.
The rules should mean Isas are no longer the poorer cousin of ordinary savings accounts. Savers should have no reason not to opt for the tax-free version now.
However, with Isas in their current state I fear savers who are looking for flexibility will opt for ordinary savings accounts instead — and then get walloped with a tax bill.
Zopa Bank lets you mix and match fixed-rate and easy- access Isas in its Smart Isa. A good choice if you are happy to open an account by app.
Shawbrook Bank pays the top rate on one-year bonds at 4.76 per cent, but is only available online. The bank lets you open just one of its Isa accounts this tax year.
Charter Savings Bank offers good rates and lets you open as many Isas, both fixed-rate and easy-access, as you want online. It pays 4.7 per cent fixed for one year and 4.81 per cent on its easy access account. But you need £5,000 to open one.
Skipton Building Society is a good option if you want to run your account through a branch. It lets you open both an easy-access and fixed-rate Isa. Its fixed rate deal is 4.5 per cent for one year — but go elsewhere for your easy-access account.
Yorkshire Building Society’s one-year fixed-rate Isa at 4.65 per cent is a good rate. But if you open one, you can’t open another with it this year.
Virgin Money: If you have your current account here you can earn 5.05 per cent in its one-year fixed-rate Isa. You can only open one cash Isa with the bank this tax year.
Sy.morris@dailymail.co.uk
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