London Capital & Finance ISA - What Happens Next?

What happens if I had an ISA with London Capital & Finance?

If you had an ISA with LCF then that ISA allowance is entirely dependent on the amount that is eventually recovered by the administrators.

LCF call centre staff appear to be claiming that LCF is not insolvent and "it's only administration". That claim is completely contradicted by the FCA statement on London Capital Finance today that clearly says the Directors of LCF realised it was insolvent so called administrators in.

London Capital & Finance ISA - What Happens Next?

Some people had transferred large sums from cash ISAs to LCF, in some cases, many tens of thousands of pounds encouraged by the promise of high rates of return and misled by the advertising that suggested it was safe and FCA regulated.

Unlike a cash ISA where your allowance is a fixed amount so if you pay in the annual ISA allowance of £20,000 you can then transfer the £20,000 plus interest to another ISA provider, with investment ISAs (which the LCF ISA is) you can only transfer the value of the investment to another provider.

So if the administrators manage to recover the whole £20,000 then that will be available to transfer to another ISA provider in time. However if less is recovered as seems incredibly likely from the information uncovered then it's only that lower amount that can be transferred so if they get back say £5000 of the £20,000 invested then that's all that can be transferred.

Until the administrators have determined the value that can be returned to investors no ISA transfers will be possible as the value to move will be unknown. It's unclear how long this process may take but the administrators have said they should have more information in the next 8 weeks. That does not mean money will be returned in 8 weeks - when some loans have years to run the process of winding up the company could take several years to complete.

I'm guessing that ISA holders will be happy with getting anything back from LCF and that the ISA allowance will be of less importance for many if it means some of their money is recovered by the administrators. It would just mean that any value recovered would be all that could be transferred to a new ISA provider and any further money would need to be added as part of the £20,000 annual allowance.

https://www.fca.org.uk/news/news-stories/london-capital-and-finance-plc-enters-administration