FTAdviser.com

• Reports
• Fund Focus
• Sector Poll
• Sector News
• About Us
• Contact Us
• Literature

Saving in Isas 'still recommended despite rate cuts'

Despite recent falls in interest rates, consumers looking to invest money for the future, including those saving for children, still benefit from using their individual savings account (Isa) allowances, experts have claimed this month.

According to Michelle Slade, press and PR officer for moneyfacts.co.uk, such accounts enable people to maximise the potentail of their money.

She said: "Isas are a great way for savers to make the most of their money and in the last few weeks we have seen the Isa season start in earnest."

The expert did, however, concede that savers have been "disheartened" by base rate falls.

http://www.savingforchildren.co.uk/Isas-still-a-wise-choice-for-consumers--181_1_19034494.html

Also extolling the benefits of Isas, Sharon Bratley, chartered financial planner for Fairinvestment.co.uk, said that the best sort of savings scheme will depend on the type of investor someone is.

She added that Isas are good because they enable consumers to benefit from "pound cost averaging".

http://www.savingforchildren.co.uk/Saving-in-Isas-always-a-good-idea--181_1_19039667.html

Meanwhile, Danny Cox, head of advice at Hargreaves Lansdown, said that Isas should always be "first on the shopping list" for people looking to accrue savings.

He said: "An Isa provides the potential for tax-efficient saving. Less tax equals more return on your investment."

The expert added that, during the current economic downturn, saving will increase among those who can afford to.

http://www.savingforchildren.co.uk/Consumers-advised-to-consider-Isas-181_1_19012861.html

However, it seems that not everyone is listening to the advice of such experts, with figures produced recently by uSwitch suggesting that as many as 4.3 million people intend to ditch their Isas.

A major reason behind such action was identified by consumers as the low rates that are currently available.

Despite these low rates, uSwitch urged people to keep their money in Isas, pointing out that some accounts are still offering an average rate of 2.05 per cent.

Meanwhile, best buy accounts are paying up to 4.25 per cent, the price comparison site added.

Personal finance expert at uSwitch.com Rumina Hassam commented: "Ditching one of the few tax friendly government offerings may not be the best course of action for savers."

http://www.savingforchildren.co.uk/Millions-of-savers-plan-to-ditch-Isas--181_1_19029817.html

Other research, this time conducted by the Co-operative, found that 73 per cent of those yet to invest in an Isa during the course of this current tax year do not plan to use any of their allowance before the deadline falls.

This represents a 13 per cent increase compared with last year.

http://www.savingforchildren.co.uk/-More-people-to-shun-Isa-allowances--181_1_19044640.html