Cash ISA, Lifetime ISA and Junior ISA savers are not using their full allowance
ISA savers are being reminded to save and make full use of their tax-free allowance all year round by The Nottingham, whose data shows nearly a quarter (24 per cent) of deposits to its ISAs were made in March this year and the first five days of April as customers rushed to beat the end of tax year deadline.
The latest Government data also shows average annual cash ISA contributions are just GBP5,187 compared with the full annual allowance of GBP20,000 while average Junior ISA contributions are only GBP830 compared with the full allowance of GBP9,000.
With Lifetime ISAs it is a better story with average annual contributions sitting at GBP2,709 compared with the total allowance of GBP4,000 and those contributing the average amount would still benefit from a GBP677.25 annual bonus. The Nottingham this month celebrated its 50,000th LISA customer as the account gathers traction with first-time buyers across social media and money saving websites.
The start of the new tax year on 6 April means savers can start as they mean to go on by making regular contributions and The Nottingham offers a range of ISAs across its branch network including fixed rate and instant access cash ISAs, Junior ISA as well as the Lifetime ISA which is available online. More online savings accounts will be introduced this summer when it launches new savings app, Beehive Money.
Jenna McKenzie-Day, Senior Savings Manager at The Nottingham, says: “The start of the new tax year is the ideal time to open an ISA and start as you mean to go on with a regular, monthly savings habit.
“We’ve seen some people saving more during the Covid-19 pandemic and although our data shows unfortunately most people are not taking advantage of their full tax-free allowance, starting early is a great way to do that and as the pandemic has shown, the importance of forming savings habits and sticking to them has never been more prevalent.
“On a positive note, seeing Lifetime ISA savers get closer to maxing out their allowance is a great step and we’re definitely seeing more interest in the Lifetime ISA, as we welcomed our 50,000th customer this month also.”
Some other recent research by the building society shows the Covid-19 pandemic has driven more interest in what building societies offer with 15 per cent of adults saying they are now more likely to take out products from a building society or other mutual.