Don’t miss out on your ISA allowance
According to M&S Money savers could be missing out on up to £23 million in tax free interest because they aren’t taking full advantage of their ISA allowance.
Brendan Cook, chief executive of M&S Money said "With an estimated two million new cash Isas to be opened in the current tax year, savers could be losing out on a huge amount of tax-free interest. We urge savers to take more interest in their savings and make full use of their cash Isa allowance."
With just over a month left until the end of the tax year millions of people are set to miss out on an opportunity to save up to £3,000 in a tax free cash ISA; at the moment this is the maximum amount anyone can invest in a cash ISA (the limit will be raised to £3,600 next year), once the tax year has ended this annual allowance will have been lost.
As we enter the last few weeks of the tax year the banks seem to be anticipating a scramble for last minute ISA customers and the last few days have seen a host of new cash ISA deals appearing towards the top of the best buy tables.
Most recently Barclays have introduced a new ‘Tax Haven’ ISA with an APR of 6.5% and claim confidently that it’s the best cash ISA deal on the market right now, given that its paying a full 1.25 points above the base rate it certainly offers good value for money. Bear in mind however that this includes a 1% bonus for 12 months after which time the rate will drop.
Indeed, many of the best deals on the market actually include a bonus period, usually, like the Barclays ISA of 1% for the first year. Amongst the top bonus deals the A&L ISA offers 6.25% including a 1% bonus until May 2009 and the Scarborough BS Notice ISA offers 6.3% but only on balances of £1,000 or more. The very best Cash ISA rates on the market such as the Abbey Super ISA or the A&L Premier ISA are 10% but require you to take out another investment product.
 It’s important that savers realise that in most cases they can switch their ISA without penalty, this means that even if you’re ISA doesn’t continue to offer a particularly competitive rate relative to the market leaders you can always transfer – keep an eye on the best buy savings tables and make sure that whichever account you opt for accepts transfers.