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Last chance saloon for ISA savers

Last chance saloon for ISA savers

Category: Savings

Updated: 29/01/2013
First Published: 04/04/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The final call has gone out to savers to make the most of their 2010/11 ISA allowance before it's too late.

Anyone hoping to make full use of their overall ISA allowance of £10,200 for the current tax year, of which up to £5,100 can be invested in a cash ISA, has until midnight on Tuesday 5 April to get their application in.

Once the deadline has passed, and the 2011/12 tax year has dawned, the tax free savings allowance for 2010/11 has gone forever.

New research from AA Savings showed that the majority (53%) of savers consider that the best use of a cash ISA is for long-term savings.

Another 17% said its best use is for the transfer of a lump sum that doesn't need to be touched.

However, only 10% were aware that an ISA could be used as an easy-access account - an option provided by a number of ISAs.

Perhaps even more worrying is that fewer than a half of people were aware that the cash ISA limit for 2010/11 is £5,100.

"It's encouraging to find that the majority of savers are aware of the tax-free status of ISAs, even though confusion remains over the tax-free maximum that can be saved," said Mark Huggins, director of AA Savings.

"This suggests that many have not been making full use of their allowance."

Mr Huggins said the research also suggests that most people want to save what they can, when they can, but prefer to be able to get their hands on their cash if they need it.

"Despite the low interest rates compared with just a few years ago, most people are doing their best to put as much money away as they can," Mark Huggins said.

"But with the new tax year, the first thing everyone able to save should do, is take maximum possible advantage of their tax-free cash ISA allowance, which is rising to £5,340, whether they want instant access to their funds or intend to leave it untouched."

The overall ISA limit will rise to £10,680 from 6 April 2011.

If you're looking for a last minute home for your ISA money, is likely to have the account for you.

  • Nationwide's e-ISA paying 3.10%
  • Barclays' Golden ISA with a rate of 3.25%
Our ISA best buys are an invaluable way of quickly hunting down the latest and greatest cash ISA deals.

Halifax, Santander, NatWest and RBS are just some of the other famous names which might just come up with the deal you're looking for.

What next

Looking for a Cash ISA - Compare cash isa rates

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Download our FREE Beginner's Guide to ISAs to find out how to use your 2011/12 ISA allowance. You will need a PDF reader such as Adobe Reader to download this guide.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.