M&S Money urges savers to make the most of tax-free savings

As the end of tax year approaches (5th April), M&S Money urges savers to check what tax-free savings they have and make sure they are making the most of their annual Cash ISA allowance.

With falling interest rates, getting a tax-free return is more important then ever. In a recent survey on behalf of M&S Money, 81% of British adults said that tax-free savings would be a priority for them in 2009. Despite this, 42% of those surveyed don't use their full annual Cash ISA allowance.

The new M&S Advantage Cash ISA option, launched in January, is proving extremely popular with customers and currently offers one of the top rates in the market. The interest rate of 3.10% AER/tax-free includes a 1% bonus until 21st April 2010.

Tax-free saving tips from M&S Money

An ISA is not a type of investment - it's a useful way of sheltering your savings inside a tax efficient ‘wrapper'.

There are two separate types of ISA - Cash ISAs and Stocks and Shares ISAs.

The annual ISA allowance is £7,200 - up to £3,600 can be saved in a Cash ISA with one provider, and the remainder in a Stocks and Shares ISA with the same or a different provider.

Think carefully before making withdrawals - once you have paid £3,600 into a Cash ISA during the tax-year, any amount withdrawn cannot be replaced during that tax year.

Top-up your ISAs before the end of the tax year - if you don't use your full annual ISA allowance before 6th April, you'll lose it forever.

ISAs can be transferred to other providers - this means you can change to a better rate, but not all providers allow transfers into their ISAs so it's best to check with them first. M&S Money accepts transfers and almost half of all applications for Advantage Cash ISA are transfers.

Consider a guaranteed interest rate - if you're looking for a guaranteed return, Cash ISAs are available with fixed rates of interest, as well as variable rates.

M&S Money also offers a Fixed Rate Savings option, with interest rates over 1, 2 and 3 years up to 2.75% AER/tax free. Customers can also split their annual Cash ISA allowance between M&S variable rate and fixed rate options, using one simple application form.

Colin Kersley, M&S Money Chief Executive, said; "ISAs were launched 10 years ago, and are still popular with people who can see the benefit of tax free saving. Although interest rates are at a historic low, good offers are still available in the competitive savings market.

"Safety is also a priority in these uncertain times, which is why M&S Money is attracting large numbers of savers applying for new Cash ISA accounts or transferring from other providers. All cash savings with M&S Money are protected under the UK Financial Services Compensation Scheme, so the first £50,000 per customer of any cash savings are 100% guaranteed".

Customers can apply at marksandspencer.com/isa