Saving Early In a Cash ISA Could Earn You More Than £125 Extra Interest

Savers encouraged to save a little and often throughout the year

03 April 2012

Saving early in a cash ISA could earn savers more than £125 extra interest1 , according to Nationwide Building Society. It has compared the interest earned when saving the full cash ISA allowance on the first day of the tax-year compared to just the last day of the tax-year.

Economic conditions continue to be difficult for savers up and down the country, so it’s understandable that not everyone will be able to save the full cash ISA allowance in April. The real message is therefore that savers should consider saving a little but often throughout the financial year, earning interest along the way. For example, even saving just £50 per month could add up to £3,200 after five years2 .

In the new tax-year ending 5 April 2013, people can save up to £5,640 in a cash ISA. Nationwide encourages all savers and investors who pay tax to make the most of their annual ISA allowance.

Richard Marriott, head of savings at Nationwide, said: “Savers who put their full ISA allowance into a product in April can earn more than £125 more interest than those that wait for the end of the tax year. Clearly, not everyone can save £5,000 in one go, but for those who can save, it’s really important to get into the habit of saving a little and often.”

Nationwide offers a range of cash ISAs that allow transfers from other providers, 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 year3.

About Nationwide Building Society:

  • Nationwide Building Society is the world’s largest building society, the UK’s second largest savings provider and third largest mortgage lender. It is also a major provider of current accounts, credit cards, ISAs and personal loans.
  • With around 16 million members, Nationwide has a relationship with almost a quarter of the UK population. In the first half of 2010/2011 alone we helped 10,000 people buy their first home.
  • Since the credit crunch began in 2007, Nationwide has remained profitable against a very difficult economic environment. In the year 2010/11 Nationwide made a strong underlying profit of £276 million – up 30% from the previous year.
  • Our strong financial performance and prudent business model meant that Nationwide was included in Global Finance magazine’s Top 50 Safest Banks in the World, one of only three UK institutions in the Top 50.

Notes to editors:

1 Estimate. Calculation assumptions:

  • Cash ISA subscribers 2010/11: 11,926,000
  • Cash ISA subscription limit: £5,640 (2012/13 allowance)
  • Average cash ISA interest rate (industry): 2.27% (CACI, December 2011)
  • Those saving the full cash ISA allowance on the first day of the tax year would collectively earn £1,526,861,928 compared to £4,183,183 if saving on the last day of the tax year. This equates to a difference of around £128 per person

2 Depending on interest rate earned over those five years. Video:

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