Personal finance expert urged savers to stop being loyal to their banks and consider moving their money to one of the top Cash ISA accounts before the new tax year starts in April
Martin Lewis, the guru of money-saving tips, has flagged two standout Cash ISAs that can give you more bang for your buck compared to the average bank account interest rates. With March marking the high season for Cash ISA activity, people wanting to make the most of their tax-free allowance are in a rush to stuff their £20,000 into these savings havens before April comes around and everything resets.
Given that the Personal Allowance is capped at £1,000 interest for 20% rate taxpayers, £500 for those on the 40% rate, and zilch for additional rate payers, parking your cash in a Cash ISA can shield your hard-earned interest from the taxman’s grasp.
Chancellor Rachel Reeves could be about to change the Cash ISA limits sometime this month, with some predicting the maximum you can put in going from £20,000 down to just £4,000.
Speaking on The Martin Lewis Podcast, available on BBC Sounds and Spotify since March 6, he said “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.”
Money maestro Martin Lewis has given a call to action for savers to ditch their bank loyalty in search of better returns. He mentioned, “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.”
MoneySavingExpert currently hails Chip as the top contender for an easy access Cash ISA, boasting a juicy 5% interest rate, sweetened with a 0.68% bonus for the first half year.
The hunt for competitive yields doesn’t end there: Tembo offers a tempting 4.8%, and Trading212’s Cash ISA isn’t far behind with a solid 4.78%. For savers inclined towards household names, the Post Office’s Cash ISA stands at 4.4%, while Skipton Building Society pitches in with a 4.25% deal.
Looking at fixed-term savings, OakNorth Bank leads with a robust 4.47% rate for a one-year commitment.
While whispers of changes to savings incentives make rounds within government corridors, Treasury Minister Emma Reynolds has yet to confirm any updates to the Cash ISA limits. Responding to Dame Meg Hillier, Chairwoman of the Treasury Committee’s concerns in Parliament, she underscored the importance of cash savings, asserting in the Commons, “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.”
