Individual Savings Accounts (ISAs)

What we look at

We’ll look at the type of ISA you have and your individual circumstances. We’ll listen to both sides of the story and investigate the facts before making a decision.

• Cash ISAs

  If you hold cash in an ISA you don’t have to pay tax on the interest. So if you miss a contribution, the potential loss is the tax you’ll have to pay on that interest outside the ISA.

  When handling these complaints, we’ll look at your individual financial circumstances to calculate the losses you may have had because you missed the opportunity to pay into in your cash ISA.

• Stocks and shares ISAs

  If you’ve missed an opportunity to use your stocks and shares ISA allowance, we’ll usually start by assuming that you would’ve invested the same amount, in the same fund, at the same price.

  We’ll then calculate how much you’ve lost out by not holding that investment within an ISA. Customers who miss out on using their allowance in a particular tax year can often put this right in a later tax year.

  Find out more about handling complaints about stocks and shares. 

• Help to buy ISAs

  Sometimes consumers tell us that they wouldn't have put their money into a Help to Buy ISA account if they'd had the right information. As a result, they've lost out on other investment opportunities.

  If you say you were misinformed about a Help to Buy ISA, we'll: 

  • look at how clear the ISA manager was in their instructions
  • check that your ISA literature and advertising was clear

  If you say you would've put your money elsewhere if you'd been given clear information, then we'll check: 

  • whether that's likely in all the circumstances
  • which alternatives would've been possible

  If you're in the process of buying a house or have already bought one, we'll look at whether you've lost out as a result of unclear information. It could be that you had to borrow money to make up a shortfall in your deposit. If you took a loan or used a credit card, we may recommend a refund of the interest charged plus 8%. We'll also consider whether this caused you any distress and inconvenience. 

• Innovative finance and lifetime ISAs

  Innovative finance ISAs are peer-to-peer lending investments and are sometimes called crowdfunding ISAs. Lifetime ISAs are for people under 40 and are designed to help first-time buyers buy their home or save for their retirement. 

  We sometimes see consumers complain that these ISAs: 

  • aren't suitable for them
  • have risks which weren't clearly explained to them 

• ISA allowances

  You may want to complain that you've been unable to take up your ISA allowance in a tax year because of something a business did wrong. 

  If we're satisfied that a business mistake led to you not being able to use your allowance, we'll consider whether compensation is appropriate. Our usual approach is to tell the business to compensate you for any financial loss you're likely to incur, as well as for any distress and inconvenience. 

• Tax liability - investment should have been in an ISA

  If you have an investment outside an ISA, you may need to pay tax on: 

  • the returns it generates while you hold it (usually by way of dividends or interest)
  • the money generated by selling it - any capital gains

  When we consider it likely that the customer will have to pay tax on the returns from the investment, our approach depends on the individual circumstances of the case. 

  Customers sometimes say they’re liable for capital gains tax when selling the investment that should have gone into an ISA.

  In these cases, we look at the customer's circumstances, including their investment history, to decide whether this is likely. The amount of compensation we might tell you to pay would depend on: 

  • how long the investment is likely to be held
  • how much the investment is likely to grow in that time
  • how the customer has used their capital gains tax allowance in the past
  • the rate of tax the customer is liable for

• Transferring your ISA

  The rules allow you to transfer:

  • a cash ISA to another cash ISA with a different provider - this shouldn’t take more than 15 working days
  • a stocks and shares ISAs to another stocks and shares ISA with a different provider - this shouldn’t take more than 30 working days
  • only the cash element from your innovative finance ISA to another provider, but you may not be able to transfer other investments from it
  • from one kind of ISA to another, for example, from a cash ISA to a stocks and shares ISA or vice versa

  If you want to transfer money you’ve invested in an ISA this current year, you must transfer all of it. For money you invested in previous years, you can choose to transfer all or part of your savings.

  If your transfer has taken longer than it should, and you feel that this has disadvantaged you in some way, we’ll investigate.