The ISA Deadline Comes Early this Year

03-Mar-2010

Easter could throw a spanner in the works for those who like to leave their savings to the last minute.  If you're planning to take advantage of your tax-free ISA allowance in time for the end of the tax year (5th April), it's worth noting that the Easter holidays leave UK savers with two fewer days in which to make arrangements this year.  Clydebank and Yorkshire Banks have estimated that on average 10% of ISA applications are made within the last two days of the tax year, which represents a total savings pot of approximately 1.5m GBP.  

This year, Good Friday falls on the 2nd April and Easter Monday on the 5th.  The new tax year starts on the 6th, directly after these two public holidays.  Therefore, if you have some money saved up and would like to make use of this year's ISA allowance, your application needs to be received by 1st April in order to be processed in time.

ISA stands for Individual Savings Account, and it is a specific type of savings account that does not charge any tax on the interest that you earn from your savings.  The current allowances for UK residents are as follows: 7,200 GBP for savers under 50, and 10,200 GBP for savers aged 50+.  

From April 6th 2010, everyone will move to the new higher allowance.  This allowance can be split between cash savings and stocks and shares investments if you choose, and you can read more about cash ISAs and stocks and shares ISAs on our website.  You are free to use different providers for these different types of ISA and so you should shop around for the best deals.

Steve Reid, retail director, Clydesdale Bank said:" With Easter falling so early this year, if you haven't already done so the opportunity to invest in an ISA this year is that little bit less.  The ISA allowance isn't flexible so beat the deadline and pay less tax."

Since the rate of interest you would earn on your savings with most banks is currently pretty low, it is definitely worth considering using your ISA allowance up before any extra savings accounts so as to get the most out of your money.  A stocks and shares ISA constitutes a financial risk, since you are investing money in the stock market.  Therefore, if you are unfamiliar with this product we'd advise speaking to a professional financial adviser before proceeding.