Having subscribed to Moneywise for many years I thought I was quite Isa savvy but my confidence has been knocked by this Isa complication.
In March 2017, I opened an Easy Access Isa issue 9 with Post Office Money, which had a one-year bonus rate. I funded this with an Isa transfer. In January 2018, I opened a two-year fixed-rate Isa issue 11 with Post Office Money, again by transfer.
I have had more than one Cash Isa with a single provider before and didn’t think anything of it but, when the bonus period on my Easy Access Isa ended, I tried to transfer it to a new provider. Post Office Money refused the transfer, stating that partial transfers are not allowed.
It seems that instead of opening two Isas, Post Office Money has bundled my two Isa products into a single Isa wrapper. Apparently, the only way I can transfer my Easy Access Isa is to also transfer the fixed-rate Isa, which will incur a breakage fee of £123 or mean waiting until the two-year fixed-rate ends.
I think this is very unfair — if I had known the Post Office would bundle my two Isas into one wrapper I would not have taken out the second Isa. I now have money that is ‘stuck’ in a low-rate account for two years!
Is this correct, and is there any way I can move my first Isa without affecting the second?
I have raised your query with the Post Office and while it appreciates your concerns it says that the Online Isa Wrapper is clearly explained through the application process in several locations.
However, the situation may not be as bad as you think. The Post Office has advised me that if you log into your account and select the variable rate Isa product, you will be able to view alternative products, which may offer higher interest rates than the one-off bonus product you currently have.
Your provider has taken your comments on board and says it will take action to ensure that customers are made aware of the option to switch products within the Online Isa wrapper.