ISA allowance reminder
With the 5 April deadline fast approaching, Post Office reminds savers they don’t have long left to make the most of this year’s £5,340 tax-free cash ISA allowance and that next year’s cash ISA allowance increases to £5,640.
New customers making in-branch applications for a Post Office ISA must apply by 31 March. Postal applications must be received and accepted by Thursday 5 April.
Cash ISAs
According to Post Office data, two thirds of Post Office customers (65 per cent) maximised their full tax free cash ISA allowance in the 2010/11 tax year.
Men were better tax-free savers than women, with 68 per cent of male savers fully using their tax-free cash ISA allowance compared to 62 per cent of women. Perhaps unsurprisingly, the best savers were those aged over 55. Men aged 55-64 living in the South East were typically the best cash ISA savers with 81 per cent of them fully using their tax free allowance.
Top towns for cash ISA saving in the 2010-2011 tax year were Llandrindod Wells and Kingston upon Thames where almost four in five (76 per cent) savers used their full allowance. Dorchester, Guildford and Sutton followed closely behind to make up the top five.
Londoners were the worst at saving in the last tax year – 30 per cent of cash ISA savers in London saved less than £4,000 compared to 25 per cent nationally.
Richard Norman, director of savings and investments at the Post Office said: “Savvy savers are well aware that if they don’t use their yearly ISA allowance, they’ll lose it and it is encouraging to see so many people fully using this tax-free opportunity. However many are still missing out.
“Post Office encourages savers to make their cash work as hard as possible, and cash ISAs are one way of doing so while avoiding tax on savings returns. The variety of accounts offered by the Post Office means there are options to suit everyone, no matter what type of saver they are.”
Junior ISAs
Post Office also offers a Junior ISA for those looking to save towards their child’s future and take advantage of further tax-free savings.
In a recent survey, Post Office found just a quarter of parents (24 per cent) plan to invest in a Junior ISA meaning three quarters of children are potentially missing out on a tax-efficient lump sum when they hit 18. Those planning to invest into a Junior ISA intend to invest an average of just £1,236 a year, or 34 per cent of the yearly allowance.
Richard Norman commented: “Junior ISAs are a tax efficient way to save toward your child’s future, whether to help with a deposit on a house or to pay for their future education. If parents paid in the maximum £3,600 annually over the course of 18 years, their children could have a healthy lump sum to start them off in adult life.”
To find out more about Post Office cash ISAs, Junior ISA and other savings products log on to postoffice.co.uk.