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EnergyOnly 25% will make the most of new ISA allowance
Filed under: Savings & ISAs
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Matt Morton/PA Wire
The company is urging consumers to move quickly however, to review the rates on their existing ISAs and hunt out the best new tax year deals available.
Your guide to banking
Need to know: Savings
Despite the new tax year throwing up a host of new market-leading ISA deals research from uSwitch has revealed that while more than four in ten consumers believe in making the most of the tax free ISA allowance, only one in four plan to save the full amount this year.
And only a worryingly low 17 per cent are aware that the annual allowance has increased by £300 from £5,340 to £5,640. Meanwhile almost half of savers have never switched to get a better rate, and those coming to the end of a fixed term deal, or a bonus rate on their instant access ISA risk ending up on extremely uncompetitive rate of interest.
And only a worryingly low 17 per cent are aware that the annual allowance has increased by £300 from £5,340 to £5,640. Meanwhile almost half of savers have never switched to get a better rate, and those coming to the end of a fixed term deal, or a bonus rate on their instant access ISA risk ending up on extremely uncompetitive rate of interest.
Your guide to banking
Need to know: Savings
Michael Ossei, personal finance expert at uSwitch.com, says: "Although we're only five days into the new tax year, several new market leading cash ISAs have already sprung up and savvy savers looking to make the most of these deals can also look forward to squeezing even more out of their tax free savings and save an extra £300 a year.
"Now is the time for savers to shop around and look out for the best possible rate. While
there has been an influx of very competitive deals launch over the last few days, savers should act quickly to bag a best a buy. It's not uncommon for providers to pull their most competitive deals early – sometimes after only one month."
Taking the Cheshire Building Society's best buy cash ISA paying 3.5 per cent as an example; depositing the full allowance at the beginning of the last tax year would have seen consumers earn a tidy £197.40 in interest. But put the same amount in at the end of the tax year, and you would have earned a paltry £16.45 and would have lost out on £180 interest.
Don't hold out for the end
While it's tempting to hold out for a better rate towards the end of the tax year, uSwitch point out that consumers risk losing almost 12 months tax-free interest.Taking the Cheshire Building Society's best buy cash ISA paying 3.5 per cent as an example; depositing the full allowance at the beginning of the last tax year would have seen consumers earn a tidy £197.40 in interest. But put the same amount in at the end of the tax year, and you would have earned a paltry £16.45 and would have lost out on £180 interest.
Great offers
Even just after the start of this new tax year, there are some great deals out there including a new instant access offer from Nationwide which pays a whopping 4.25 per cent (for current account customers only).
Meanwhile Birmingham Midshires is offering 4.05 per cent for a two year fix, and Santander has a 3.5 per cent one year fix.
More stories
Meanwhile Birmingham Midshires is offering 4.05 per cent for a two year fix, and Santander has a 3.5 per cent one year fix.
More stories
