Only days left to make the most of this year’s ISA allowance

As the deadline for the end of this tax year looms (5 April), savers are being urged to make the most of their tax-free allowance in a cash ISA. According to research from Alliance & Leicester Savings one in eight of those surveyed (13 per cent) have saved in a cash ISA this tax year, but have not reached their limit yet and only a fifth (18 per cent) plan to save the full £3,600 limit this tax year.

For savers who have left it right to the last minute, Alliance & Leicester, Abbey and Bradford & Bingley branches will all be accepting deposits for the current tax year until Saturday 4 April.

When it comes to the interest rate paid on savings 83 per cent of respondents consider a good rate as an important factor when choosing an account, yet almost two fifths (37 per cent) say they don't know what the average interest rate is for cash ISAs on the market at the moment.

Reza Attar-Zadeh, Director of Savings and Investments said, "With less than a week to go before the end of this tax year, the savvy savers among us will be aware the tax-year deadline means making the most of the benefits of ISAs. Those looking to do so will be pleased to know that they can invest as little as £1 in an ISA, including our Reward ISA, and every penny really does count when it comes to starting off a savings pot. With an interest rate of 3.5% AER on Reward ISA, a lower rate tax payer would have to find a standard savings account paying 4.37% to earn the same annual return."

Reza Attar-Zadeh concludes: "It really is a case of use it or lose it as once the deadline passes and we roll into a new tax year, any unused allowance from the previous tax year is gone forever. Making the most of your tax-free allowance by sheltering your savings in a Cash ISA is a great way to make the most of your money - ideally by using this year's allowance and then starting to build a tax-free savings pot in the new tax year too."