10% Premier ISA open to 16 year olds to start tax-free saving

Research from Alliance & Leicester Current Accounts has revealed that an alarming number of young people have a big knowledge gap when it comes to savings, with a staggering two thirds (67%) of working 16 to 21 year olds admitting they don’t know what the abbreviation ‘ISA’ stands for, with a further one in ten (10%) saying they have never even heard of an ISA.

Despite the Government’s attempts to help young people start saving from an early age, 15% of 16-21 year olds say they still don’t understand the new rules and regulations for ISA products. Worryingly, 16% of this age group admit they save no money at all and nearly one in ten (9%) say they would rather spend money than put it away for a rainy day.

Having transparent, easy to understand products seems to be one of the most important issues that needs to be addressed, as nearly a fifth (18%) of working 16-21 year olds say they think the concept of an ISA is very confusing, a further one in ten (11%) think they are too complicated to understand and 8% think they are too complex to actually set up.

Emma Walkley, Product Manager at Alliance & Leicester comments: “Young people should be encouraged to start saving early to ensure their financial future is safe. ISAs are often the first step into the world of regular saving, with customers able to make use of tax free advantages without risk on any amount from £1.”

Emma Walkley continues: “By offering everyone aged 16 or over a market-leading interest rate of 10%, we hope this will encourage younger people to bridge their knowledge gap, and whether they are working full-time, part-time or doing casual work, it will help make their hard-earned money work harder for them.”

Premier ISA Issue 2

Premier ISA Issue 2 is available for customers who open a new Premier Current Account, Premier 21 or Premier 50 current account. Customers can earn 10% gross p.a./AER (variable) with tax free savings with no notice for withdrawals. As with other Alliance & Leicester products, customers have 24/7 access to their account via telephone and Internet banking. New customers can take advantage of saving up to £3,000 in this tax year with interest earned tax-free. This tax free allowance will increase to £3,600 per tax year from 6 April 2008.

The Alliance & Leicester Premier 21 current account is a tailor-made current account for young people between the ages of 16-21 years who start to earn money from an early age. Premier 21 offers a market-leading in-credit rate of 10% AER on balances up to £1,000 and new customers to the account can also benefit from tax-free savings with the Premier ISA Issue 2 – also offering savers a rate of 10% gross p.a./AER (variable).

To find out more information on Alliance & Leicester’s award winning Premier current accounts, visit alliance-leicester.co.uk/currentaccounts.