Don’t miss out on this year’s ISA tax breaks

As the end of the current tax year draws closer, the Post Office is urging savers to take advantage of their £3,600 tax free cash ISA allowance.

A recent study by the Post Office found that those who do not take full advantage of their annual ISA entitlement are missing out on £1.33bn in tax-free interest every year - either by leaving their hard-earned cash in low paying taxable accounts or by not saving the maximum £3,600 allowance.

With the Bank of England Base Rate reaching an all time low, savers have been hit hard. It is therefore no surprise that 56 per cent of people believe now is the worst time ever to save. As such, the Post Office is recommending that people make their savings work harder for them by taking advantage of tax breaks available.

Richard Norman, director of savings at the Post Office, said: "Each year everyone is entitled to put £3,600 into a tax-free cash ISA, but many fail to do so. Savers are struggling more than ever so now is the time to make sure their cash is working as hard as possible for them.

"Taking advantage of the tax breaks available will earn savers extra money and can help supplement losses in their taxable savings accounts. However, the deadline for this year's tax allowance is fast approaching so people need to act quickly if they want to take advantage of this year's allowance."

The Post Office Cash ISA, which is currently offering a rate of 1.75 per cent, is ideal for savers who want to take advantage of their annual tax-free allowance. It guarantees never to be more than 1 per cent below base rate, meaning investors who stay with the Post Office over the long term will not be penalised.

Savers need as little as £1 to open a Post Office Cash ISA, which is available in all Post Office branches and by post; application forms can be requested by phone or printed off at www.postoffice.co.uk/savings. Funds can also be transferred in from an existing cash ISA.

The deadlines for new customers applying for the Post Office Cash ISA or Post Office Investment ISA in the 2008-09 tax year are:

Saturday 28 March for in branch applications
Thursday 3 April for postal applications

To find out more about the Post Office Cash ISA, visit postoffice.co.uk/savings