Canny cash ISA investors planning to save £59bn
Cash ISA investors in the UK are planning to save an impressive £59 billion this year according to new research from Post Office Savings.
Over a third of UK adults (37 per cent) are planning to save an average of £3,210 into a cash ISA for the 2012/2013 tax year, with one in eight (12 per cent) intending to save the full allowance (£5,640). However, a quarter (25 per cent) are not planning to maximise their full allowance, potentially missing out on £1.3 billion in tax free interest.
The majority of those who aren't planning to save the full amount into their ISA (75 per cent), say it's because they cannot afford to save £5,640 a year. However, one in five (18 per cent) are choosing to save into a separate savings account instead of a cash ISA. In total 44 per cent of people say they will not save into a cash ISA this year.
Richard Norman, Director of Savings and Investments for Post Office, said: "It is encouraging to see people taking advantage of the tax allowances available on savings, and if you are making the effort to put money aside, it is important to make it work as hard as possible for you. Whether this means investing a lump sum or a little money into an ISA every month, it all helps people's hard earned cash go that extra bit further."
In terms of how people plan to save, a third of cash ISA investors (34 per cent) expect to save money into their ISA every month while a further third (34 per cent) expect to put in a lump sum once a year. One in five (19 per cent) will save into their cash ISA less than once a month.
Most people say their cash ISA savings will be coming from their regular salary (45 per cent) or it will be transferred from another savings account (40 per cent). For one in eight (12 per cent) it will be their work bonus which will help boost their ISA.
The new Post Office Premier Cash ISA offers excellent returns for savers who wish to take advantage of their tax-free cash ISA allowance this year. With a competitive interest rate of 3.01% tax-free/AER variable which includes an extra long introductory bonus of 1.26% tax-free/AER fixed for 18 months, customers can save from as little as £100 up to £5,640 this tax year. They can also consolidate all their tax-free savings in one high interest account by transferring-in cash ISAs held with other providers.