It's the year of the ISA, but still we waste £3.8bn

It's one of the golden rules when it comes to looking after your personal finances: if you've money to save, head straight for a mini cash individual savings account (ISA).

In this way, £3,000 of your cash will grow tax-free every year, often at rates of more than 5 per cent. In many cases, ISAs allow you instant access to your money in an emergency.

"Mini cash ISAs are a complete no-brainer," says Anna Bowes of the independent financial adviser (IFA) Chase de Vere. "What's the point in paying tax when you don't need to? Especially when these accounts tend to pay at least Bank of England base rate [4.5 per cent] and above, which is better than your bog-standard savings account."

Many warnings have been issued about the failure of Britons to save enough for their retirement, or even for a rainy day. But it seems that the message might at last be getting through.

Nick Robinson, managing director of the internet bank Intelligent Finance, last week suggested that the UK could be on track for a record year in terms of new ISA accounts.

Intelligent Finance reports that the number of cash ISA accounts taken out in the first three months of the current financial year (between 6 April and 5 July) rose by 13.1 per cent to 5.6 million, from 4.95 million last year.

But it still leaves plenty of us failing to take advantage of this tax break. Some 25 million people continue to sacrifice interest on savings in banks and building societies instead, according to research from the Portman building society. That means we're missing out on up to £3.8bn in tax-free interest.

With five months before the end of this tax year, Ms Bowes urges savers to take action.

"People tend to think about cash ISAs only in March and April - but there's a good few months of tax-free savings still to be had this year."

Portman is currently topping the best-buy tables with its 25-days' notice mini cash ISA, paying 5.25 per cent. Savers have to invest the full £3,000 in one lump sum, and the headline rate includes an introductory bonus of 0.65 per cent that drops away after six months.

For smaller balances, the Halifax ISA Saver Direct is paying 5 per cent on as little as £1, with no short-term bonus.

Saffron Walden, Herts and Essex building society also offers 5 per cent on balances of £1 upwards, with no introductory bonus. But savers must give 180 days' notice of any withdrawal.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
Sport
Van Gaal said that his challenge in taking over Bobby Robson's Barcelona team in 1993 has been easier than the task of resurrecting the current United side
football
Arts and Entertainment
The Great British Bake Off 2014 contestants
tv
PROMOTED VIDEO
Arts and Entertainment
filmThe Battle of the Five Armies trailer released
News
news
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
Extras
indybest
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
Life and Style
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Entry Level Fund Accountant (Edinburgh)

    £17 - £20 per hour: Cameron Kennedy Recruitment: My client, one of the worlds ...

    SQL DBA/Developer

    £600 per day: Harrington Starr: SQL DBA/Developer
 SQL, C#, VBA, SQL Server, ...

    Risk Analyst - VBA/EXCEL

    £300 - £600 per day: Harrington Starr: Risk Analyst Access, EXCEL, VBA, RISK, ...

    Market Access Analyst (FIX 5.0, Equities, Derivatives)

    Negotiable: Harrington Starr: Market Access Analyst (FIX On-boarding, FIX 5.0,...

    Day In a Page

    The children were playing in the street with toy guns. The air strikes were tragically real

    The air strikes were tragically real

    The children were playing in the street with toy guns
    Boozy, ignorant, intolerant, but very polite – The British, as others see us

    Britain as others see us

    Boozy, ignorant, intolerant, but very polite
    Countries that don’t survey their tigers risk losing them altogether

    Countries that don’t survey their tigers risk losing them

    Jonathon Porritt sounds the alarm
    How did our legends really begin?

    How did our legends really begin?

    Applying the theory of evolution to the world's many mythologies
    Watch out: Lambrusco is back on the menu

    Lambrusco is back on the menu

    Naff Seventies corner-shop staple is this year's Aperol Spritz
    A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

    A new Russian revolution

    Cracks start to appear in Putin’s Kremlin power bloc
    Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

    Apartheid’s sadistic killer that his country cannot forgive

    The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
    Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

    Standing my ground

    If sitting is bad for your health, what happens when you stay on your feet for a whole month?
    Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

    Greene prays for chance to rebuild after injury agony

    Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
    Israel-Gaza conflict: Secret report helps Israelis to hide facts

    Patrick Cockburn: Secret report helps Israel to hide facts

    The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
    The man who dared to go on holiday

    The man who dared to go on holiday

    New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
    Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

    Best comedians: How the professionals go about their funny business

    For all those wanting to know how stand-ups keep standing, here are some of the best moments
    The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

    The Guest List 2014

    Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
    Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

    Jokes on Hollywood

    With comedy film audiences shrinking, it’s time to move on