What is ISA season and why does it matter for your savings?

What is ISA season?

ISA season is a time when many providers offer their most competitive ISA rates in an attempt to entice customers looking to use up the last of their allowance before the end of the tax-year. Equally, providers may also be looking to attract ‘early-bird’ savers wanting to get their £20,000 ISA allowance invested quickly at the start of a new tax-year.

When is ISA season?

There are no set dates for ISA season; it typically occurs annually throughout March and April as one tax-year ends (5 April) and another begins (6 April). However, it can start as early as February depending on the state of the savings market and customer appetite.

Why is ISA season important for your savings?

Use it or lose it

ISA season is a helpful reminder to ‘use or lose’ the last of your annual allowance before the tax-year ends. Any remaining allowance can’t be carried across into the next tax-year, which means you could be missing out on the chance to maximise tax-free interest on your savings.

More competitive returns

You can also enhance your savings during ISA season by capitalising on some of the attractive rates available. Even if you have an existing ISA, you could consider transferring it to a different provider offering more competitive returns.

When moving funds from one ISA to another, it’s important to use an ISA transfer to retain your tax-free benefits and to avoid using up your ISA allowance unnecessarily.

For more information, see our guide to transferring ISAs.

Should you open an ISA?

While anyone can open an ISA, those who’ll feel the most benefit are savers earning enough interest from a traditional savings account to breach their Personal Saving Allowance.

If you’re a basic-rate taxpayer receiving more than £1,000 in interest from savings per tax-year, or higher-rate taxpayer earning more than £500, an ISA is one way to protect your returns from tax.

Find out more about how your savings are taxed.

What time of year is best to open an ISA?

If you don’t already have an ISA, ISA season may be a good time to consider opening one, as you can take advantage of some of the attractive rates on offer. Furthermore, opening an ISA at the start of a tax-year, you’ll have the full financial year to use up your allowance.

However, competitive rates and their timings aren’t guaranteed. As it’s possible for providers to amend their offerings at other times of the year, it’s good practice to regularly review top rates.