Brits withdraw £11 billion in ISA cash this year

Britons have dipped into £11 billion worth of ISA cash in the last 12 months, according to Abbey Savings, whose research discovered Britons withdrew almost three times as much compared against the previous 12 months.

More than 7 million savers have raided their ISA savings with the average saver withdrawing £1,573 in the past 12 months. This time last year the average ISA withdrawal was just £579 meaning an almost threefold increase (171 per cent).

Almost two fifths (39 per cent) of those questioned cited general living expenses as the main reason for their withdrawals. The number of people citing luxury purchases (22 per cent) and high street purchases (5 per cent) has fallen since last year, when it stood at 26 per cent and 8 per cent respectively. This year more than 3 million people (13 per cent) have turned to their savings because of redundancy or reduction of income, while unexpected expenses such as home repairs have also forced 5 million (19 per cent) Brits to delve into their savings.

Those with young children appear to be relying on savings to a greater extent than most, withdrawing 32 per cent (£4,015) of their savings over the past 12 months and citing general living expenses as the major cause (58 per cent).

Reza Attar-Zadeh, Director of Savings and Investments at Abbey, commented: "The sharp increase in the amount that people are withdrawing shows that many of us may have needed our savings to make ends meet, and just goes to highlight the importance of having savings to fall back on.

"There's no denying it's been a tough year so it's understandable that people have turned to their savings in these trying times. It's vital that we all keep some money aside in the event of an emergency but raiding your ISA account can prove costly in the long term as what you take out you can't replace".

ISA accounts are held by 42 per cent of the adult population and are one of the most popular ways to save (second to Instant Access Savings Accounts held by 65 per cent of adults).

Abbey, along with Alliance & Leicester and Bradford & Bingley, offers a range of savings options to suit every savings needs, including our latest offer from Bradford & Bingley, an internet only 2 Year Fixed Rate eISA offering savers a highly competitive 3.75 per cent AER on a minimum of £1,000. Or our Postal ISA from Abbey offers 3.50 per cent AER, fixed for 2 years on a minimum of just £1.

Increase to ISA limits for over 50's

From 6 October cash ISA limits will increase for the over 50's from £3,600 to £5,100. For any customers looking to open one of our Fixed Rate ISAs, aged 50 or over, we're pleased to confirm that they will be able to top up to their new ISA limit.

In addition any existing customers of this age who have already opened one of our variable rate or fixed rate ISAs this tax year will be able to top this up to the new limits to ensure they do not miss out.