Cash ISA savers may be missing out on greater returns, as research by Charter Savings Bank shows that 50% of cash ISA savers aged 55 or older have never moved their tax-free savings to another provider. This is compared with 25-to-44-year-olds, the group most likely to switch providers, with around 62% having done so.
Those aged 55 or over said their main reasons for not switching were wanting to keep their money in one place (43%) or not believing that they would be able to secure a more competitive deal (42%). Additionally, 9% have never transferred simply because they think switching will be too complicated.
Granted, ISAs can be confusing; with a yearly maximum ISA allowance, there's only so much new money you can invest (£20,000 until 5 April and then another £20,000 for the next tax year). However, transferring funds from one ISA to another doesn't have such a limit.
You can transfer ISA funds that you've invested this year – provided you move it all at once. It's also possible to move all of your previous years' investments, or split them into separate pots and even move them into different types of ISAs. And your new provider should take care of the paperwork for you – never take your money out of the ISA yourself to switch it, as that would make it liable for taxation – so there's really no reason not to switch, unless you're getting the top rate already.
"Transferring cash ISAs is a straightforward process, now that the industry has signed up to new standards and is utilising new technology and systems," Paul Whitlock, director of Savings at Charter Savings Bank, commented. "People regularly shop around for more competitive deals on a wide range of goods and services, and that should also be the case in the cash ISA market."
Indeed, out of all those aged 55-plus who have moved their ISA funds, 33% did so because the rate on their ISA was reduced. Meanwhile, 35% of this group assess their cash ISA rate every year to see if they could get a better rate, while 33% only move when their fixed rate term comes to an end.
When was the last time you checked on your ISA? If you're not currently in the middle of a fixed rate term, why not go to our ISA charts to see if you could transfer to a better deal?
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.