Delaying saving into 2008/09 ISA could cost in lost interest

Britons may be losing nearly £4.3 billion interest by delaying using their yearly ISA allowance until April 2009, according to research conducted by Abbey Savings.

A saver who delays depositing the maximum £3,600 into a Mini Cash ISA from 6 April 2008 to 5 April 2009 could miss out on interest of £360.00. With 12 million Cash ISA savers in the UK, the potential lost interest could amount to £4,320 million.

Reza Attar-Zadeh, Director of Savings & Investments, said:”Mini Cash ISA rates are better than they have ever been, and the annual limit has just increased to £3,600. . Many people leave saving in a Mini cash ISA to the end of tax year. However, people that leave saving in an ISA to the last minute face losing a significant amount of interest throughout the year. Additionally, the competitive deals that are currently available may not be available next year.

“It is important to remember that people can use their £3,600 tax-free ISA allowance at any time, not just at the tax-year end.”

Abbey currently offers two cash ISA products – the Abbey Direct ISA and the Abbey Super ISA (Issue 2). The Super ISA is a Mini Cash ISA and offers 10.0 per cent AER tax-free until 1 May 2009 if customers put an equal amount or more into any Abbey investment product.

Abbey’s Direct ISA account pays 6.25 per cent tax-free/ AER on balances from £1. The account offers customers instant access to funds through post, telephone, ATM or online. The minimum opening balance is £1 and transfers can be made into the account from other ISAs.

The Super ISA is designed to help customers build their savings in a tax-efficient way, while offering certainty of return. The product allows instant access to money placed in the Super ISA offering 10.0 per cent interest, whilst deposits in the Guaranteed Growth Plan are invested for the longer term (3.5 or six years) offering guarantees both on the money deposited and a minimum return, if the money is left for the full term. The product allows transfers in of existing ISA balances customers may already hold.

For further information on Abbey’s ISAs, visit abbey.com.