Money-saving expert Martin Lewis has drawn attention to a couple of top-tier Cash ISA options that could outshine the interest rates found in regular bank accounts.
With March marking the height of activity for Cash ISA contributions, individuals eager to maximise their tax-free savings allowance are looking to fill up their £20,000 limit before the start of April ushers in the new tax year and with it a reset allowance. Given the Personal Savings Allowance is set at £1,000 for basic rate taxpayers at 20%, £500 for higher rate 40% taxpayers, and unavailable to additional rate taxpayers, a Cash ISA serves as a crucial shield against taxation on interest gained.
In light of rumours that Chancellor Rachel Reeves might soon announce changes to the limits on Cash ISAs this month—including suggestions of a significant cut in the maximum contribution from £20,000 to just £4,000—Martin Lewis is advising savers to make the most of their current opportunities by choosing some of the market-leading providers rather than defaulting to the usual offerings from banks.
Speaking on The Martin Lewis Podcast on BBC Sounds and Spotify, dated March 6, Martin Lewis recommended: “At the moment with savings you can be earning getting on for 5% easy access, the likes of Chip and Trading212 are offering that in their Cash ISAs, and there are a whole host of other accounts out there that are paying decent rates.”
Martin Lewis, the money-saving expert, has underscored the importance of not being blindly loyal to banks when it comes to savings accounts. He suggested: “Tesco, if you want a big name, 4.41% in its easy access account, all of those are probably smacking the pants off your bank. So stop being loyal with your bank would be the answer, get your money out of your bank and put it in the top paying savings accounts not just sticking with your bank.”, as reported by the Express, reports Cambridgeshire Live.
MoneySavingExpert (MSE), Martin Lewis’ renowned website, currently ranks Chip as the top choice for an easy access Cash ISA, boasting an attractive 5% return, which includes a bonus of 0.68% for the first six months.
Other notable rates include Tembo’s 4.8%, and Trading212’s competitive 4.78% Cash ISA. For those who prefer well-known brands, the Post Office is offering 4.4% on its Cash ISA, while Skipton Building Society is providing a 4.25% return.
For savers looking for fixed returns, OakNorth Bank is now offering a 4.47% rate for a one-year fixed term.
While the government mulls over potential incentives for savers, Treasury Minister Emma Reynolds has stopped short of confirming any alterations to the Cash ISA limits. Addressing security concerns about the Cash ISA raised by Dame Meg Hillier, chairwoman of Labour’s Treasury Committee, in Parliament.
Emma Reynolds gave assurances in the Commons, stating: “Cash savings provide a vital source of savings for a rainy day, we recognise that.
“But equally, we want to build a better investment culture in our society so that it’s not just the 8% of people who can afford financial advice who can have the opportunity of better rewards by investing in British companies and others in our economy.”