Upheld: incorrect calculation of inherited ISA allowance; unfair application of process complaint against Nationwide Building Society

Decision detail

Summary

Mrs S's estate complained that Nationwide Building Society incorrectly calculated inherited ISA allowance by excluding an ISA that Mrs S opened several hours before her death, into which she had transferred just under £10,000. Nationwide refused to include this ISA in its calculations, citing its standard process of calculating interest back to midnight the day before death. The ombudsman found Nationwide acted unfairly in applying this process to exclude the newly opened ISA and upheld the complaint. Nationwide was ordered to pay an additional £1,360.42 gross in interest to the two affected ISAs, in addition to £150 compensation already provided.

The Ombudsman's reasoning

The ombudsman determined that Nationwide acted unfairly by applying its standard process (going back to midnight the day before death) in a way that excluded an ISA opened on the day of death from inherited ISA allowance calculations. The ombudsman found this approach was not fair in the circumstances, particularly given that Mrs S had deliberately transferred funds into the ISA hours before her death. The remedy was based on the impact to the estate, specifically the lost interest on the two affected ISAs over an 18-month period.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website