Fidelity to shut windfall Isas

Fidelity is to close its windfall Isa scheme after the number of accounts dropped from a peak of 200,000 to 34,000.

Windfall Isas came to prominence in 1997 when many investors received windfall shares from financial institutions, which de-mutualised and floated.

“Fidelity is giving remaining customers a choice of what to do with their windfall Isa proceeds”

A number of groups have since closed their windfall Isas for these shares as investors transferred into other investments.

Investors can switch into any fund on Fidelity FundsNetwork or transfer out in cash to another Isa plan manager. Those who do not make a decision will have all their shares placed in the Moneybuilder index fund.

The closing dates for the windfall Isas is October 1.

A Fidelity spokeswoman says: “Fidelity is to close its windfall Isa service due to declining demand. Several other fund companies had windfall Isa services and closed within a year or two of opening, we maintained our free service for many years. (article continues below)

“Fidelity is giving remaining customers a choice of what to do with their windfall Isa proceeds which preserve the tax benefits of their Isa account.”

Mark Dampier, the head of research at Hargreaves Lansdown, says: “These accounts have been closing as the likes of Alliance & Leicester, Bradford & Bingley and Halifax have all struggled or gone bust. They have been disastrous and people have found better options.”