Average Cash ISA subscriptions in Wales increase 38%
Cash ISA savers in Wales have been taking advantage of the higher limits, squirreling away an average £869 more this ISA tax-year than they did pre-credit crisis in the 2007/8 tax year.
Despite continual pressure on household budgets, data released by Principality Building Society, reveals that cash ISA subscriptions this year are up across 42 local areas in Wales, with the national average increasing from £2,300 in 2007/8 to the current average of £3,169.
Principality’s Savings Manager, Kate Murray, commented: “The Cash ISA has really come into its own over the past five years as savers have been turning to cash based investments as a safer alternative to weather the economic climate. Our data proves that savers are indeed taking advantage of the annual rise in ISA limits introduced in the 2009 budget and protecting their hard-earned cash in a tax haven despite the tough savings environment.”
ISA savers in Llandudno increased their cash investments the most - with a whooping £1,402 more saved on average in 2011/12 compared with 2007/8, closely followed by Shrewsbury (£1,392), Chester (£1,348) Monmouth (£1,333) and Carmarthen (£1,283).
In fact, North Wales has outperformed all other regions, with an average increase of £1203, compared with West (£1,055), South (£799), East (£797) and Cardiff City (£660).
And while the amount saved in ISAs is generally driven by age, with older savers more likely to have ISA savings and indeed higher balances, the average increase in ISA subscriptions over the past five years was lowest amongst 31 to 40 year olds.
Kate added: “There are some clear ISA hotspots in Wales, where savers are making the most of their tax-free benefit and we are particularly pleased to see that even the younger generation have been increasing subscriptions. With people between the age of 16-30 facing some significant costs ahead of them whether in the form of university fees, a deposit for a house or even their first car, cash ISA’s should be a first choice savings account to help you achieve your goal.”
“As the tax year ends on 5th April there is still plenty of time to use this year’s allowance and top-up existing ISAs or take one out if you haven’t already.”
With the current average ISA subscription in Wales at £3,169 welsh savers still have an average £2,171 available to tuck away into cash ISAs before the 5th April 2012 in order to maximise their 2011/12 tax allowance of £5,340. Cash ISA savers in Ebbw Vale have the most to put away - at £2,813 - in order to make sure they don't lose out on their tax-free benefits.
When it comes to cash ISA balances, the Wales average is £11,255 – representing a quarter of the total £44,640 that savers could have sitting in a cash ISA if they had maximised their allowance since the concept of ISAs was first introduced in 1999.
Cash ISA balances in the West are the highest across Wales with savers in Carmarthen and Mumbles holding balances in excess of £13,000. In contrast, average ISA balances in Ebbw Vale are the lowest in Wales - 14% lower than the national average.
Despite the fairer sex is better known for spending, it seems that the cash ISA has attracted the attention of female savers in Wales, with more women than men holding an ISA in the region. Yet when it comes to squirreling away the cash men hold an average £321 more in their accounts.
Graeme Yorston, Chief Operating Officer, commented: “Despite that the gap between base rate and the interest rate paid on savings is higher than it has been in years, we appreciate that the savings environment is still tough for people. The good news is that we have seen more and more people taking out ISAs with us year on year as they look to make the most of their money and we believe that there is more that could be done in this space to help support savers further. Aligning ISA limits with inflation has gone some way towards helping savers but the Chancellor could provide further relief if he removed the restriction on the amount that can be saved into a cash ISA allowance. This would allow savers to put the total cash ISA and stocks and shares ISA allowance solely into a cash ISA if they wish. Similarly, in recognition of the fact that savers are looking for less volatile investments, allowing stocks and shares ISA’s to be transferred to cash ISA’s would certainly provide more incentive to savers.”