Thousands of customers are still waiting months for their savings to be transferred between Isa accounts by banks and building societies, who blame a huge backlog for the continuing delays.

Times Money has been contacted by readers venting their anger and frustration with the UK's biggest savings providers. Most banks and building societies have promised to backdate interest to the date the account should have been opened, but many savers complain of not being contacted for months on end.

Financial institutions have been criticised for transferring savings by sending cheques through the post - taking up to a month - rather than moving funds electronically.

Vince Cable, the Treasury spokesman for the Liberal Democrats, wrote to the British Bankers' Association after a number of his constituents complained about the delays. He says: “It is inexcusable and inexplicable that banks are using slow cheque clearance to move customers' funds. The only rational explanation is that they are holding on to customers' cash to make more in interest.”

A working group of banks, building societies and trade associations was set up last month to look at improving the system used to transfer Isa funds. The Banking Code, a voluntary set of rules governing the way that customers are treated by financial institutions, may also be revised to include a mandatory time limit for Isa transfers, according to the Banking Code Standards Board (BCSB).

Revenue & Customs already insists that bank transfers are completed within 30 days. However, providers have been unable to stick to these rules.

This year Nationwide, the UK's largest building society, Barclays and Halifax were among those offering interest rates of more than 6 per cent to Isa customers who transferred their funds, prompting large numbers of customers to switch accounts.

Providers have since blamed the chronic delays on the overwhelming demand from customers attracted by these high rates.

Nationwide closed its Isa division to new business at the beginning of June after admitting that new customers transferring cash from other providers were facing a long wait. It hopes to reopen its Isa division when the backlog is cleared over the next few weeks.

Barclays, Alliance & Leicester and Birmingham Midshires have all been the subject of a huge number of complaints received by Times Money. However, almost all providers have been affected, including Halifax, HSBC, Lloyds TSB, Bradford & Bingley and Cheltenham & Gloucester. To tell us your experiences, go to timesonline.co.uk/moneycentral.

Case Study: Six-month Halifax Saga

Mary Tabeart, of Fareham, Hampshire, has waited almost six months for Halifax to process her Isa application. In March she applied for a four-year fixed-rate Isa, attracted by an interest rate of 6.2 per cent. She asked for £16,500 to be transferred from her Nationwide Isa to the new account.

Mrs Tabeart, pictured with her husband, Colin, formally complained to Halifax in June after the bank failed to contact her about the transfer for three months. However, she heard nothing except for a standard letter acknowledging the complaint and was planning to contact the Financial Services Ombudsman next week. “I feel like I have been beating my head against a brick wall,” she says. “It has been one long saga. I don't know how many forms I've filled in. It's not good enough.”

After the intervention of Times Money, Halifax managed to open the Isa and promised to backdate Mrs Tabeart's interest to the date it received the cheque from Nationwide. “I'll have to stay with Halifax because I can't face another transfer, but I'm not giving it any more business,” she says.