Cash ISAs

Dear Sir or Madam,

My suspicion is that the tax advantages of cash ISA vehicles are
largely offset by the lower interest rates that are typically
available for such schemes as compared with interest rates
available for non-ISA savings schemes.

What evidence does the Treasury have comparing interest rates
available to cash ISA savers with interest rates available in
non-ISA savings schemes?

What information does the Treasury have comparing the overall value
for money available in the market place from cash ISA offerings as
against non-ISA savings vehicles, taking account of other factors,
including administrative complexities in switching providers?

Yours faithfully,

Franc McLaughlin

Dear responses, FOI,

What information does the Treasury have on the problems reported
here -
http://www.thisismoney.co.uk/savings-and...

Yours sincerely,

Franc McLaughlin

Dear responses, FOI,

The article said -

Cash Isas offer 40 times less interest
Sylvia Morris, Daily Mail
27 January 2010

Cash Isa savers are being paid 40 times less interest than those in
similar taxed accounts, Money Mail has discovered.

We have uncovered a widespread rip-off that has left some Isa
savers earning just pennies in interest on thousands of pounds of
savings.
When cash Isas were launched as tax-free accounts in April 1999,
they were the top-payers at every bank. In some cases today, they
are the worst.

Banks are sitting on a massive pile of money on which they want to
pay as little interest as possible. More than 18m savers have
£167bn in cash Isas.

In April 1999, cash Isas earned an average 6.32% - 1.07% above base
rate. Now the average is 0.41% - 0.09% below base rate. Tax relief
was worth £13 a year on every £1,000 saved for a basic-rate
taxpayer. Now it is worth just 82p.

Some Isas are truly terrible. Cheltenham & Gloucester - part of the
Lloyds megabank - pays a measly 0.05% - equivalent to 50p interest
on every £1,000 saved. Yet it pays up to 1.9% on its taxable High
Street savings account.

At Halifax - another part of Lloyds - savers earn 0.5% before tax
in its branch-based Guaranteed Saver compared with a miserly 0.1%
in its Cash Isa. In both cases, savers would be better off in the
taxable account - even after tax is deducted.

Banks know savers are reluctant to move their money from cash Isas,
so they feel able to pay less interest on Isas, effectively
stealing our tax relief. Money Mail's Stop! Isa Thieves campaign is
demanding banks end this rip-off.

The fury felt by savers gained another powerful voice with the
launch yesterday of an action group called Save Our Savers.

The Rev John Strain, from Save Our Savers
(www.saveoursavers.co.uk), says: 'One of our key goals is to secure
better rewards for savers and to make politicians aware of the
disgust people feel about savings rates.

'There is real political concern about keeping interest rates low
for borrowers, but no one has spoken up for savers. Low interest
rates have been disastrous for ordinary savers and taking the tax
relief on Isas is unfair. For pensioners, savings form a
substantial part of their livelihood.'

Our campaign has gained the support of the Conservatives. 'We need
a system where banks are competing for customers and people are
easily able to compare the rates on offer and take advantage of the
best deal,' says David Gauke, Shadow Exchequer Secretary.

'The fact that banks are not fully passing on the advantages of the
tax status of an Isa demonstrates the need to make this area more
competitive and put greater power into the hands of the consumer.'

Last week, Money Mail revealed how banks pay much less on
fixed-rate cash Isas than on their equivalent fixed-rate bonds.
Banks and building societies know we are keen to use up our annual
cash Isa allowance to put our savings outside the reach of the
taxman. This stands at £3,600 for this tax year for the under-50s
and £5,100 for those aged 50 and over.

Hope that helped.

Yours sincerely,

Franc McLaughlin

Dear responses, FOI,

Any indication when you expect to meet your statutory obligation to
reply promptly?

Yours sincerely,

Franc McLaughlin

Dear responses, FOI,

Please disclose details of any single situation from your records
where commercial decisions of financial service providers have not
proved sufficient to safeguard the interests of consumers.

Yours sincerely,

Franc McLaughlin

Dear responses, FOI,

To start from the end ..
Yes, this request is related to my previous requests about ISA's.
You answered my previous request by saying that ISA terms were a
commercial decision for providers. But I say there is a long
history of markets not working in the interests of consumers -
despite commercial competition - and consequently requiring
regulation. My hope was that your response to the present request
might help you to acknowledge that. Since I ask only for one
instance, it seems to matter little how wide I draw my request ..
unless you find that your records hold no instance of providers
needing regulation to safeguard the interests of consumers!

Yours sincerely,

Franc McLaughlin