Build up your ISA pot by switching your savings

Savers are being urged to make the most of their ISA allowance; top it up, and then switch accounts to get the best deals available.

Following the Government's changes after the last budget, any over 50 tax payer can top up their ISA from October 6th 2009; the top-up investment must be with their existing ISA provider, but savers should then look to change to the highest paying ISA.

Calculations by moneysupermarket.com show savers who have used their full cash ISA allowance in the same account for the past 10 years rather than swapping to the top product will have lost out on an extra £3,290 of tax free cash.

Further research from moneysupermarket.com found 31 per cent of over 50's savers have never switched savings accounts, meaning nearly a third could have had money languishing in poor paying accounts. 26 per cent of over 50's savers have never even checked their existing rates, meaning they are potentially missing out on top rates.

Kevin Mountford, head of banking at moneysupermarket.com, said: "Those with savings would be wise to make use of their cash ISA allowance, and those who already have an ISA should top it up when possible now the annual allowance has been increased to £5,100.

"Inflation and the Bank of England Base Rate are at an all time low and cash ISAs are paying around two per cent, so they are still a very good proposition for savers. However, it's more important than ever to ensure your savings are working hard for you. Saving within an ISA is the first step to easy cash - taking the time to swap your money to the highest paying ISA is where savers need to be clever.

"Banks and building societies have started to get their acts together and most providers now provide electronic transfers, making switching a pain free experience. Most accounts will also allow you to withdraw cash without any loss of interest or tax implications should you need money at a later stage."