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Number of savers turning to cash ISAs on the rise, survey finds

POSTED: 18th February 2013
IN: Personal News
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How many people still use individual savings accounts (ISAs) every tax year? With a reputation for having meager interest rates in recent years, it would be easy to assume that the figure has been falling as savers look for alternative methods to make their money work.

undefinedYet new research shows that an ISA is still seen to be a useful way of investing money. Findings from uSwitch.com, published this morning (February 18th), revealed that 31.5 million Brits still intend to put money into a cash ISA in the current tax year. That's a remarkable 63 per cent of those questioned and a 26 per cent rise on last year.

So it appears that the ISA's reputation as a safe, secure and productive place to put cash is not only staying on an even keel, but growing. The average saving this year will increase by £939 to £3,723, while 77 per cent of those questioned said that they will be willing to make sacrifices to ensure they max out their ISA allowance.

Despite this, an ISA does not only have to represent a safe place to put money away from the taxman - it can also gain interest. For example, a one-year Fixed Rate Cash ISA from Aldermore delivers gross annual interest of 1.75 per cent, while a two-year Fixed Rate Cash ISA returns 1.85 per cent. Furthermore, a three-year Fixed Rate Cash ISA can return as much as two per cent.

Speaking about the survey's findings, Michael Ossei, personal finance expert at uSwitch.com, explained that there is plenty on offer in an ISA for those looking to expand personal savings.

"Cash ISA rates have plummeted in recent months and savers are having to make do with the lowest returns in years," he noted.

"Yet despite this, savers will be flocking to cash ISAs in their droves with a 26 per cent increase in the number of savers this year compared to last. And they will be saving more too - tucking away almost £1,000 more this year compared to the last."

Savers have until April 5th to take full advantage of their 2012-13 allowance of £5,640.

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  • Personal Savings
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