Stash cash in an ISA before it's too late

Putting money into a mini cash individual savings account (ISA) is a complete no-brainer.

If you've got money to put by, it should go straight inside one of these tax-free savings wrappers. Fail to do so and, in effect, you're donating cash to the Chancellor's coffers.

You can save up to £3,000 a year tax-free in a mini cash ISA - and rates are currently topping 5 per cent. But with the end of the tax year looming (it's less than three weeks away, on 5 April), you'll need to act fast if you're going to take advantage of this year's allowance. Any part of it remaining unused by the above date will be lost.

"Time is of the essence," says Susan Hannums from independent financial adviser Chase de Vere. "It is vital that if you have cash languishing in any account and have not made use of your ISA allowance, then you should do so immediately. What is the point of paying tax on your savings if you don't have to?"

Many ISAs now offer the benefits of easy withdrawal and penalty-free access. Abbey even offers an ISA account that comes with a cash card.

Lisa Taylor from the financial analyst Moneyfacts stresses that mini cash ISAs are not just for those people with long-term savings plans and large sums to invest. "Cash ISAs can offer instant access to funds while requiring minimum deposits as low as £1," she explains.

But before they take the plunge, it's crucial that savers understand the conditions attached to their chosen account.

"Some will charge you to transfer money into a cash account [from another account]," continues Ms Taylor. "And they often include short-term bonuses within the [advertised interest] rate."

An astonishing three quarters (23 million) of UK taxpayers will put nothing into an ISA this year, research by Portman building society shows. That means we're missing out on £3.56bn in tax-free interest.

For "pure simplicity", Ms Hannums picks out the Halifax's Saver Direct ISA, paying 5 per cent on balances of £1 or more. Alternatively, she recommends Alliance & Leicester's Direct ISA (issue 2), paying 5.2 per cent, also on balances of at least £1.

"This does include a bonus of 0.7 per cent," she points out. "But it lasts until April 2007, so you should take advantage of the rate now, and then move your money when the bonus comes to an end."

For those happy to bank online, Bradford & Bingley pays 5 per cent on its internet-only account (a minimum investment of £1,000 is required).

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Voices
The male menopause: those affected can suffer hot flushes, night sweats, joint pain, low libido, depression and an increase in body fat, among other symptoms
voicesSo the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Arts and Entertainment
Anna Smaill’s debut novel, The Chimes, is a fusion of fantasy and romance
booksMan Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Sport
Ji So-Yun scores the only goal of the game
sport
Arts and Entertainment
One of the Pyongyang posters, the slogan of which reads: ‘Let the exploits of the northern railway conductors shine!’
art
Life and Style
Linguine with mussels and fresh tomatoes
food + drink
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: DBA Developer - SQL Server

    £30000 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Customer Service Administrator

    £13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

    Recruitment Genius: Dialler Administrator

    £22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

    Ashdown Group: Contracts Manager - City of London

    £35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

    Day In a Page

    Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

    US betrayal of old ally brings limited reward

    Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
    VIPs gather for opening of second Suez Canal - but doubts linger over security

    'A gift from Egypt to the rest of the world'

    VIPs gather for opening of second Suez Canal - but is it really needed?
    Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

    'How can I possibly be on the list with these writers I have idolised?'

    Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
    Art of the state: Pyongyang propaganda posters to be exhibited in China

    Art of the state

    Pyongyang propaganda posters to be exhibited in China
    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

    Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
    The male menopause and intimations of mortality

    Aches, pains and an inkling of mortality

    So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
    Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

    Bill Granger's seaside-inspired recipes

    These dishes are so easy to make, our chef is almost embarrassed to call them recipes
    Blairites be warned, this could be the moment Labour turns into Syriza

    Andrew Grice: Inside Westminster

    Blairites be warned, this could be the moment Labour turns into Syriza
    HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

    The mystery of Britain's worst naval disaster is finally solved - 271 years later

    Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
    Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

    'I saw people so injured you couldn't tell if they were dead or alive'

    Nagasaki survivors on why Japan must not abandon its post-war pacifism
    Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

    The voter Obama tried hardest to keep onside

    Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
    RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

    RuPaul interview

    The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
    Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

    Secrets of comedy couples

    What's it like when both you and your partner are stand-ups?
    Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

    Satya Nadella: The man to clean up for Windows?

    While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
    The best swimwear for men: From trunks to shorts, make a splash this summer

    The best swimwear for men

    From trunks to shorts, make a splash this summer