ISAs & PEPs news
The forgotten ISA season
6 August, 2007
Brits neglect their tax benefits in the second half of the year, as new statistics show that the amount opening ISAs experiences a gradual drop in the second half of the year
This could be due to overspending on summer holidays, reduced advertising, or the recent hike in interest rates causing the extra money which would have been put aside each month to be eaten up in mortgage repayments.
Whatever the reason for straying from their savings there certainly is a move away from ISAs. Abbey has found that only 22.9 per cent of ISAs are opened in the last six months of the year, however by contrast 46.6 per cent of non-ISA savings are opened during the same period.
Savers are always urged to use up their £3,000 annual ISA allowance first when putting money aside to make the most of the tax-free benefits. Then any extra money put aside during the tax year can be put into a standard savings account.
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Alexia Kilby, head of savings at Abbey, said: “The concept of an ISA season has obscured a simple fact – you can take advantage of your ISA allowance at any time of the year.
“There have never been more attractive rates for cash ISA investors. Abbey’s Direct ISA, for example, currently offers rates up to 6.25 per cent(4), while our Super ISA – available when you invest the same amount or more into an Abbey Guaranteed Growth Plan – offers 8.10 per cent.(5)
“We would urge savers to ensure they use their ISA allowance to ensure they minimise their tax bill.”
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