Savings: 8 Cash ISA tips for the end of the tax year


Hints and tips 150 px_istockThe end of the tax year is traditionally the time when savers make a mad scramble to use up their Cash ISA allowances for the current tax year.

If you use Cash ISAs or think they might be for you, then before you make any final decisions read our top tips for getting the right Cash ISA at the end of the tax year.

Tip 1: Use it or lose it

This might sound obvious, but it’s probably the most important tip.

Your ISA allowance cannot be carried forward from one tax year to another, it’s therefore vital that you use the allowance before the end of the tax year, if you don’t it will be lost.

Tip 2: They are worth it

We quite often hear people suggest that the Cash ISA allowance is small and not worth bothering with.

We disagree!

The Cash ISA allowance is £5,760 for the 2013/14 tax year, this means a husband and wife can shelter over £10,000 of their savings from tax each year. Over the next 10 years, if the Cash ISA allowance is used each year, that could mean well over £100,000 of savings with no tax on the interest.

Tip 3: Shop around

Another seemingly obvious tip, but it’s amazing how many people don’t bother to shop around for the best savings interest rates and simply take whatever rate their current bank or building society offer them.

Use a best buy table to find the best savings interest rates for your Cash ISA and don’t put up with poor interest rates when you don’t have to.

Tip 4: Think about Cash ISA transfers

Cash ISAs, like other savings accounts, often pay a bonus rate of interest for a period of time to make the account look more attractive. Generally speaking when the bonus rate comes to an end the interest rate becomes extremely uncompetitive, however many of us never think about moving out Cash ISA elsewhere.

There are options for people looking to transfer their existing Cash ISAs to fixed rate Cash ISAs , instant access Cash ISAs and notice Cash ISAs , you just have to do a little research.

Don’t put up with a poor rate of interest after a bonus has been removed; think about the benefits of transferring.

Tip 5: Take advantage of bonus rates, but remember when they end!

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This might sound strange after tip 4 but using the bonus rates offered on some Cash ISAs, particularly instant access Cash ISAs and notice Cash ISAs, can work to your advantage, providing of course you remember when the bonus comes to an end and you then shop around for a better rate.

Tip 6: Use next year’s allowance as soon as you can

Why wait until this time next year before you use your Cash ISA allowance?

The sooner you use it the sooner you can start to benefit from tax free interest.

Tip 7: Use different Cash ISA providers

You don’t have to use the same bank or building society for your Cash ISA each year.

Loyalty to a particular bank or building society is rarely repaid when it comes to savings, shop around ruthlessly for the best rates and don’t be afraid to take your savings elsewhere if you can get a better interest rate.

Tip 8: Fixed rate Cash ISAs offer the best interest rates

The longer you are prepared to tie your money up for the better the rate of interest you will get.

Of course using a five year fixed rate Cash ISA when you need the money next year makes no sense, however if you can afford to tie up your savings for a period of time then you will generally be rewarded by a higher rate of interest.

Our team of Independent Financial Advisers in Nottingham are experienced in maing savings and investments work harder for you. If would like advice on your savings or investments call one of our IFAs today on 0115 933 8433, alternatively enquire online or email