Nationwide Building Society · DRN-6275467

The complaint Mr L complains that Nationwide Building Society incorrectly applied interest to his Individual Savings Account (ISA) following a change to the effective date in February 2025. What happened Mr L said the annual anniversary of his ISA is in September, but when Nationwide made a change in February 2025, they paid the full year’s interest. Mr L said he reasonably believed this meant the anniversary had moved to February, but Nationwide paid interest again in September 2025. Mr L said Nationwide treated his withdrawals between September 2024 and February 2025 as affecting his rate, which reduced the amount of interest he received. Because Mr L felt that Nationwide’s treatment of his ISA was inconsistent and unclear, he asked it to treat February as the new anniversary date and recalculate interest for February 2025 – February 2026 correctly and pay him any shortfall caused by the error. Mr L said Nationwide refused to adjust his interest rate and didn’t communicate effectively and he complained. Mr L said he kept money in the account not earning the expected interest as he was under the impression withdrawals would affect the interest. Mr L would like Nationwide to amend the interest correctly from one year after it was last paid. In its response Nationwide said it couldn’t amend the interest period for Mr L’s ISA. Nationwide said it converted existing accounts into a new format from 6 February 2025 and as part of this ‘migration exercise’ it wrote to all affected customers in September 2024 and advised further information would follow. And said, it wrote further to Mr L on 12 July 2025 to confirm his new account details and his annual interest date as 24 September. Mr L said these weren’t received. Nationwide said once letters are sent, delivery is beyond its control. Nationwide explained that interest during the transition period was capitalised from the previous capitalisation date up to 6 February 2025. The ISA terms and conditions were updated online and said Nationwide would contact customers to confirm their new interest payment date. Nationwide said Mr L’s ISA is an instant access account so withdrawals don’t affect the interest rate although a reduced balance will result in lower interest earned. Nationwide said it was sorry for any misunderstanding regarding Mr L’s interest payment date, but it didn’t uphold his complaint as it hadn’t made a mistake. Mr L wasn’t happy with this and referred his complaint to our service. Our investigator didn’t recommend the complaint be upheld. He was satisfied Nationwide acted fairly by providing information about changes to Mr L’s ISA and said it has confirmed the timing and despatch of its letters. He said Mr L could have verified the anniversary date via his mobile banking app or Nationwide’s online banking or annual statements, or by just calling Nationwide. Mr L disagreed with the investigator and requested an ombudsman review his complaint. He said he couldn’t see the interest information on his banking app or statements. He said receiving letters on the anniversary doesn’t give clarity and he shouldn’t have been expected to call Nationwide to find out about his account. He said the terms of the account fail to specify what happens in the event of an updated account or a partial payment.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Mr L is unhappy that Nationwide didn’t inform him that the anniversary date of his ISA hadn’t changed despite providing him with his annual interest early. And unhappy that he lost interest due to Nationwide’s confusing actions and communications towards the account. I sympathise with Mr L for the confusion he felt about the date when interest would be applied to his account. I have looked closely to see if Nationwide made a mistake or provided him with poor service. Nationwide’s ‘migration exercise’ in 2025 was intended to update the accounts of its many customers. Nationwide claims that it followed the established process correctly in relation to Mr L’s account and informed him of the correct date on which interest would be applied. It said the terms and conditions of the ISAs were updated online and letters were sent to him. I can see from Nationwide’s records that interest was capitalised on accounts by Nationwide on 6 February 2025 in accordance with the amended terms and conditions. Previously, and still relied upon by Mr L, the terms stated that, ‘interest will be paid at the end of the day before the anniversary of your account opening.’ The regulations that financially regulated businesses must follow require that information is provided in a durable medium, by which is meant letters. There is also a responsibility on consumers to manage their accounts, including to query changes they are unsure about. I’ve seen copies of Nationwide’s letters to Mr L of 23 September 2024 and 12 July 2025 and note they are correctly addressed and Nationwide’s records show they were despatched. The former states that changes will be made to his account on 6 February 2025 and sets out the terms and conditions, which would not affect the interest rate. The letter said the name of Mr L’s ISA would change from a ‘Loyalty ISA’ to a ‘Reward ISA’ and that interest would be paid on the anniversary of opening instead of 30 September. And further: ‘To make sure you don’t have to wait more than 12 months for your interest to be paid, we will make a one-off payment into your account on 6 February 2025. This is to cover the interest earned from the 30 September up until 6 February 2025. It also means you could receive more than one interest payment this tax year.’ The second letter provides a new sort code and account number and states; ‘your interest will now be paid on 24 September.’ This letter was also important because it told Mr L he would need to change the account details for any payments for the account. And so, Nationwide has shown that it explained by letters and changes to its terms and conditions the changes it was making and that payment of interest in February 2025 was a one-off adjustment as part of its transformation of the accounts it provides. It’s unfortunate Mr L didn’t receive the letters. Nationwide has shown the information Mr L required was also available online via internet banking, but Mr L has said he doesn’t use internet banking. Nationwide has shown us that its banking app provides information about the date when interest is applied. I note that Mr L told the investigator that he cannot see the information on the app. Had Mr L received either of Nationwide’s letters about the changes, or looked at the terms and conditions of the account online, or enquired about the changed name of his account and account number, I think he might reasonably have been prompted to put his concerns to

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Nationwide. I agree with the investigator there was good reason for him to contact Nationwide and query the situation. Without doing so, there isn’t anything more that we would expect Nationwide to be able to reasonably foresee about Mr L’s confusion. From the information Nationwide provided, I don’t think it was reasonable for Mr L to believe that Nationwide had permanently changed the anniversary date of his account to February from September. The anniversary date of his policy was and remained September each year. I don’t think it would be fair to hold Nationwide accountable for Mr L’s confusion on this point as it has fulfilled its responsibility to communicate the account changes. Mr L said Nationwide applied a lower interest rate to his ISA on the grounds of his previous withdrawals. I can see from the account information and terms and conditions that Nationwide has not penalised Mr L by paying a lower interest rate. It is clear from the terms and conditions that Mr L’s account remained an easy access account where withdrawals could be made without affecting the interest rate applied by Nationwide. I haven’t found that Nationwide has made a mistake in its handling and transformation of Mr L’s ISA account and so it follows that it would not be fair to require it to pay him compensation for ‘lost’ interest, or to change the anniversary date of Mr L’s ISA as he requested. My final decision For the reasons I have given it is my final decision that the complaint is not upheld. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr L to accept or reject my decision before 25 May 2026. Andrew Fraser Ombudsman

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