HMRC issues update to anyone with an ISA after banks told to make changes

People looking to take advantage of the new Independent Savings Account (ISA) rules that give greater freedom to savers will struggle to find any major bank following them, as no high street banks are currently offering partial transfers or multiple accounts to their customers.

The Manchester Evening News can reveal that this is because ISA providers, including all of the major banks, did not receive final guidance on the new rules from HM Revenue and Customs until the day they came into effect, April 6. This means greater uncertainty for savers who might want to open multiple ISAs to take advantage of offers, or transfer their funds to another scheme.

Many of the changes were first promised in Chancellor Jeremy Hunt's November Autumn Statement, but the trade body for the UK's finance industry has said that the ISA industry did not receive the final guidance on which they could make the changes until after the new rules came in. Now, ISA managers and the big banks are hurrying to update their systems to offer these services to savers.

READ MORE: HMRC's 2024 ISA changes: What savers need know to maximise free cash

These were not the only big ISA changes that were implemented this month, as new rules restricting accounts to over-18s only, which banks had a legal duty to get in place by April 6, also came into effect, as well as an auto-enrolment so that savers do not need to re-apply to activate a dormant ISA.

A UK Finance spokesperson said: “ISA providers were only given the final guidance needed to roll out the new optional changes on 6 April.

"Changes like these take time and resource, and therefore different elements of the changes may be offered by providers at different times. For any customers looking to take advantage of the new optional ISA changes, we would recommend contacting your provider to check the options available.”

The Manchester Evening News contacted each of the six major banks, HSBC and Barclays confirmed that they had received the information late, while the others deferred to UK Finance to provide a statement.

A spokesperson for HSBC said: “We welcome the government’s reforms and support their aim to increase consumer choice and understanding of ISAs. Whilst we are not in a position to implement the non-mandatory changes right now, we will consider implementing them in the future.”

According to This is Money, none of the UK's high street banks are currently offering partial transfers on their ISAs, nor are they offering the ability to open multiple ISAs. This is because complicated back-end systems need to be overhauled or upgraded to offer the new service to customers - so they might not be available until later this year.

However, savvy savers are not entirely in limbo, as HSBC, Halifax, Lloyds, Natwest, and Santander are all allowing customers to open accounts with them, even if they have already opened one with another ISA provider.

HMRC said the changes will have a 'minimal' impact on savers, adding that ISA managers were sent a newsletter in March detailing many of the key changes.

An HMRC spokesperson said: “We’ve been working closely with industry to implement these changes as soon as possible. For most of the changes, it’s up to ISA providers to decide whether to offer them to customers, such as the ability to make partial transfers.

“The impact on savers will be minimal with some providers having already implemented several of these changes and we expect others will follow shortly.”