…by not fully utilising their annual cash ISA allowance
12 March 2012
Cash ISA savers are losing out on £500 million in interest by not fully utilising their annual cash ISA allowance, Nationwide Building Society has found.
In the current tax year ending 5 April 2012, people can save up to £5,340 in a cash ISA. There are 12 million cash ISA subscribers , with an average subscription per account of £3,190 - a short fall of £2,150. Using the average cash ISA interest rate across the industry , it means cash ISA savers are losing out on £500 million of extra interest.
Nationwide encourages all savers and investors who pay tax to make the most of their annual ISA allowance. Not everyone has an ISA and many others do not necessarily use their full allowance.
Nationwide allows cash ISAs from other providers to be transferred to any Nationwide cash ISA, while also promising that it will pay interest on the date it receives the transfer application (provided funds are free to move and not subject to a notice period) – a move that has already benefited savers £1.6 million in the past year.
Richard Marriott, head of savings at Nationwide, said: “ISAs are an absolutely great thing. For savers, they’re fantastic because you get all of the interest you earn on your savings account. On most savings accounts, you have to pay tax on the interest, but you get to keep it all in an ISA.
“Our research shows that savers are losing out on more than half a billion pounds of interest per year – that’s an enormous amount of money and it works out at £50 per person. People should really maximise the amount they save in an ISA if you can. You should also remember that each ISA limit is an annual limit; if you don’t use it, you lose it.”