Halifax ISA to pay instant interest

Savers who transfer their cash ISAs to Halifax will receive instant interest thanks to a fast-track scheme for beating the average 26-day wait to complete the switch.

Halifax promised to start paying interest on transferred accounts as soon an application form is completed.

The UK's biggest cash ISA provider, part of Lloyds Banking Group, said consumers would start to receive interest on their account on the day it received a completed ISA transfer form.

The move comes after an investigation by the Office of Fair Trading found it takes an average of 26 days to switch an ISA from one provider to another, with a quarter of transfers taking more than 30 days.

Halifax estimates consumers collectively lose £24 million in interest each year as a result of these delays, as during this period savers continue to earn the lower rate of interest paid by their existing provider. There can also be a gap of up to five days during which no interest is earned at all.

Consumers cannot transfer an ISA from one provider to another themselves, as they would lose the tax-free status of the money held in the account if they did.

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