ISA war gathers pace

Rachel Thrussell, Head of Savings at Moneyfacts.co.uk comments: “The rush for a slice of the tax-free market is really heating up now, with 42% of mini cash ISA products being amended since the beginning of February and 80% since the beginning of January.

“As previously predicted, the last few weeks have seen the banks and building societies upping their game as the new tax year approaches. Last year’s best buys were dominated by rates up to a maximum of 6.05%. However, in what has become a far more competitive environment this year, all the best buy rates are paying 6.10% and above.

“With all the best buy accounts detailed above, apart from Barclays Bank, accepting transfers in, anyone with existing ISA balances should consider switching to one of these accounts. Consumers could potentially have saved up £27,000 in tax-free savings since ISA’s began in 1999, or £36,000 including previous Tessa-only ISA monies. Transferring to an account paying just 0.1% higher interest could make a big difference.

“As usual we see the most attractive rates being offered on packaged ISAs. But such attractive looking rates will usually come with conditions attached. Whilst such deals will not appeal to all savers, there will be some that are happy to opt for an investment product or growth bond as part of a wider investment strategy.”