Wary of equities? Invest in a Cash ISA

TISA - Tax Incentivised Savings Association - is urging investors who are wary of equities to ensure they maximise contributions towards their Cash ISA as this can be used to purchase a Stocks & Shares ISA at a later date, without leaving the tax free wrapper.

But with the end of the tax year looming on April 5, TISA says investors need to act now if they have not yet used their 2008/09 ISA allowance, or risk losing the tax free benefits. Once the tax year ends ISA contribution allowances for this year will be lost forever and cannot be reclaimed.

TISA Director General Tony Vine-Lott says: "If the events of the past 18 months have told us anything it's that it is essential to have a savings nest egg. ISAs are a fantastic savings vehicle offering tax free returns and in the case of Cash ISAs it is easy to access money if there is an emergency.

"As we approach the end of the tax year investors should look out for the good deals on offer in terms of discounted management fees for Stocks & Shares ISAs. For those able to lock money away for a longer period there are also bonus rates on offer for Cash ISAs, although interest rate penalties are likely to apply if money is withdrawn before the end of the term."

Many providers have deadlines for the receipt of applications at the end of March and with April 5 falling on a Sunday investors should act well before the deadline.