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Savers continue to build ISA savings

Savers continue to build ISA savings

Category: Savings

Updated: 26/10/2011
First Published: 26/10/2011

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 It is now over 6 months old so the content may be out of date.

Savers have continued to build up their ISA savings, with people squirreling away an average of more than £8,000 in their tax-free accounts.

The accounts have proved a rip-roaring success since they were launched in 1999 and are the second most common personal finance product in the UK , behind the current account.

It is thought that 40% of households in the UK are saving into an ISA account.

And research conducted by Halifax has revealed that the average ISA balance is now £8,505 – the equivalent to a third of the national average pre-tax annual earnings of £27,235.

It is the older generation that are leading the way in the savings stakes, figures show.

Savers aged between 55 and 64 have an average balance of just more than £11,000, rising to almost £12,500 for those between 65 and 74.

Savers aged 75 or more having the biggest ISA savings cushion in the UK , with just over £14,100 stashed away for a rainy day.

By contrast, savers in the age band 25 to 34 have an average balance of £3,100 (64% below the average for all savers) and those who are between 35 and 44 have an average ISA balance of £4,798.

There is also a divide in savings between the North and South of the UK .

ISA customers in South Buckinghamshire have the highest average balance, which at £11,059 is 30% higher than the UK average of £8,505, with Harrow (£10,976) and Chiltern (£10,958) following closely.

Twenty-two of the 30 local areas with the highest cash ISA balances are in southern England , with the South East holding the highest average balance by region of £9,142.

At the other end of the spectrum, there are four areas where the average balance is below £6,000: West Lothian (£5,889), Newham (£5,835), Glasgow City (£5,750) and Hackney (£5,455).

Currently ISA savers are allowed to save £10,680 a year, £5,340 of which can be invested in a cash ISA.

The limit will increase to £11,280 from next April as a result of September's high inflation figures.

To begin your search for a cash ISA with a cracking rate of interest, head over to the Best Buy tables.

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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.