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Latest News
03 Sep 2014

New ‘Super Isa´ Triggers £5bn Boom In Savings

The recent launch of Nisas - or ‘Super Isas´ - has seen almost as much money being invested in one month than in the previous six months, according to an article on The Telegraph website.

With savers taking advantage of the new £15,000 tax-free limit, figures from the British Bankers Association (BBA) reveal that nearly £5 billion was deposited in Nisa accounts in July 2014, the article states.

The BBA is said to regard the news as an “encouraging” sign of the nation´s improving savings culture. However, critics argue that higher limits mean banks and building societies are expecting to see an increased amount of savings, and have been reducing their rates on Isas – the average rate has dropped from 1.57% to 1.54% since Nisas were introduced.

Rather than competing to attract savers with the best rates, the market has become “relatively subdued”, stated Charlotte Nelson from the Moneyfacts website.

Furthermore, the recently figures could be due to the fact that savers held their money back in preparation for the new rules; rather than an increase in the amount people save regularly. With the new rules, savers were able to move money from investments into their new Isa savings accounts.

Research published this month by Lloyds Bank suggests that the average proportion of income that UK households save has halved over the last 40 years. Whereas households saved approximately 9.9% of their income from 1974-1984, they now save just 4.8% in either bank accounts and/or shares and pensions.

HMRC is due to publish annual figures for the opening of Isa accounts later this week.

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