New ISA introduction leads to rise in savings deposits
27 Aug 2014
July saw a significant rise in savings deposits, following the introduction of the New Individual Savings Account (Nisa) rules, according to a report from the British Bankers' Association.
Savers deposited some £4.9bn in Nisas in July, after low levels of deposits earlier in the year. Usually there is a surge in deposits into tax-free savings accounts in April, as the new tax year starts. However, deposits into ISAs in April totalled £3.9bn, compared with £6.3bn in the same month in 2013, and £7.5bn in April 2012. The figures suggest that many savers were waiting for the launch of Nisas before paying in.
The introduction of Nisas to replace ISAs meant that the allowance rose to £15,000 and, for the first time, could be held in cash, or stocks and shares, or any combination of the two. In addition, any money that held in stocks and shares Isas can now be transferred into a cash Nisa (although some providers might not allow partial transfers).
About half the UK adult population - some 23 million people - have a tax-free ISA or Nisa but, with interest rates remaining low, savers are on average only getting a return of 0.86% on these accounts, according to the Bank of England.