New tax year, new ISA limit available for savers
With the start of the new tax year, consumers have the chance to benefit from another year's ISA allowance and protect their hard earned cash from the tax man. From April 6th 2012, the ISA limit has been increased to £11,280, of which £5,640 can be saved in a cash ISA.
With average top rates up by 0.20 per cent since last year there is even more reason for consumers to consider how to make the most of their allowance. A comparison of ISA products against non ISA products also shows little difference between rates; however tax payers will reap the reward from tax free benefits offered by ISAs.
In the last couple of days, there have been a number of new ISA bond product launches including the Starter ISA Issue 2 from Nottingham Building Society offering a market leading rate of 5.00 per cent. In the easy access ISA market there have also been a couple of new launches from the building societies, for example, Nationwide has launched the Flexclusive ISA with a rate of 4.25 per cent. This is only available to new or existing FlexAccount customers.
Kevin Mountford, head of banking at moneysupermarket.com, said: "The start of the new tax year should encourage all those savers who failed to make use of their ISA allowance to make a fresh start this year and ensure any savings they have are in a tax efficient wrapper.
"By thinking about your ISA allowance at the beginning of the year rather than at the end it means you can make the most of protecting your savings from the tax man and help boost your savings pot. Many people will have focused on sorting this year's allowance rather than transferring their existing pot, so consumers should make it a priority to action this sooner rather than later.
"We have already seen a number of new products come onto the market at the start of the year and it's encouraging to see rates are creeping up year on year. With rates on ISAs and non ISAs on a par, it's a no brainer for consumers to make the most of their ISA allowance. It's also important savers who took out an easy access account with a short term bonus to note when the bonus finishes and act to switch. Otherwise, they may well end up on a rate much lower than the leading offers in the market, causing them to miss out on much needed additional interest."