If you wish to get the most on your 2009-10 Isa allowance, you cannot wait until the last minute.
Clydesdale and Yorkshire Banks have reminded consumers that the deadline – April 5th – falls on Easter Monday this time around.
They estimate that most years, ten per cent of Isa applications are made in the last two days before the tax-year end.

However, because of the bank holiday, they are urging savers to arrange their Isa investments well in advance of the deadline.

Steve Reid, retail director at 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.”

Consumers over the age of 50 can place £10,200 in their Isa accounts, while all other savers have access to a £7,200 tax-free allowance.

©2012 MoneyBlog. All Rights Reserved.

One MP says consumers need to be encouraged to save more following the recession.
Mark Hoban, shadow financial secretary to the Treasury, said the UK economy has become too heavily reliant upon debt over the past couple of years and this must change now.

He claimed that the savings ratio has increased during the recession as people have re-evaluated their finances.

“Let’s make sure that, so people feel more confident in the future, rather than borrowing again, people save more,” Mr Hoban added.

He added that savings are needed both for unexpected occurrences, such as redundancy and retirement.

Consumers have until April 6th to take advantage of their 2009-10 tax-free Isa allowance, which is £10,200 for over-50s and £7,200 for all other savers.

From the next tax year, the higher Isa allowance will become available to all consumers, meaning they will be able to place £5,100 in a cash Isa and the same amount in a stocks and shares account.

©2012 MoneyBlog. All Rights Reserved.

With millions struggling financially as a result of the economy, about one in four Britons wish they had started saving earlier in life.
National Savings & Investments, NS&I, carried out this study which shows that about 22 per cent of people wait until they are 30 until they start saving and 13 per cent wait until they are 40.
However, 24 per cent of UK adults regret not saving more in the past 18 months to deal with the economic downfall and 32 per cent wish they had started saving earlier in life.
On a more positive note, the research into savings habits also found that the average Briton is likely to start saving seriously at the age of 25, with men found to be more likely to plan ahead and boost their savings accounts in preparation for major life events such as buying a house or starting a family.

John Prout, NS&I’s savings spokesperson, said: “It’s great to see that most Britons started to save seriously in their mid-twenties. And for those who have not yet developed the habit it is not too late to start.”

A separate study recently carried out by the F&C also revealed that one in four women between the ages of 35 and 45 have no savings in the bank, with many feeling they have no control over their finances.

©2012 MoneyBlog. All Rights Reserved.

Santander has launched its new Flexible ISA, which is also available through the Alliance & Leicester brand.
Paying a market-leading 3.50%, the Flexible ISA is available to new and existing customers of the Santander and Alliance & Leicester brand.
The rate is also guaranteed to be at least 3.00% above the Bank of England base rate for 12 months and the account offers customers unlimited penalty-free withdrawals.
It has a minimum deposit of £1 and, because this is a cash ISA account, the maximum you can deposit at present is £3,600 or £5,100 for the over-50s.
When the new tax year begins on April 6, the tax-free allowance will rise to £5,100 for everyone, so you could save even more.
However, you cannot transfer ISA funds from existing accounts. If you want a better rate for money saved in previous years, you’ll need to look elsewhere.
This is a variable rate account but the guarantee that it will stay 3.00% above base rate guarantee makes it a very competitive deal. However, after 12 months, it plummets to Santander’s variable rate, which currently sits at 0.50%. You should check the rate and consider transferring your money when that happens.

©2012 MoneyBlog. All Rights Reserved.

A new service has been launched by the Fair Investment Company which allows their customers to take control of their own Isas and other investments.

Nick Scarrett, head of pensions and investment at the firm, said discounts of up to 100 per cent are available on initial charges.

“It is Isa season, so people are looking to make the most of their allowances,” he commented.

“We want our customers to get a better deal for their money, so not only do we provide exceptional choice, value and service, but we have negotiated preferential terms with individual fund managers.”

As a result, it will be cheaper to invest with the firm than directly through fund managers. It has been reported that the majority of consumers lack knowledge on the new Isa tax-free allowances set to come into force on April 6th.

As well as gaining access to savings interest rates, customers of all ages will be able to save up to £10,200 tax-free every year.

©2012 MoneyBlog. All Rights Reserved.

Northern Rock’s 100 per cent savings guarantee is to be removed and the Building Societies Association BSA is glad.
The Treasury announced earlier this week that from May 24th, savers with the bank will revert back to ordinary £50,000 protections offered by the Financial Services Compensation Scheme.
BSA director-general, Adrian Coles, said the removal represented “a significant step” to returning the cash savings market back to a level playing field.

“The BSA has actively lobbied for the removal of Northern Rock’s 100 per cent savings guarantee as societies are fast becoming the only providers of financial services not to be directly subsidised or supported by the state.”

He added that the guarantee has enabled Northern Rock to attract substantial inflows following the bank’s nationalisation.

“We also call on the Treasury to ensure that the part-nationalised banks – Lloyds and RBS – do not operate in a way that distorts the savings market through their Government ownership,” Mr Coles said.

©2012 MoneyBlog. All Rights Reserved.

According to research, many savers are choosing against using their Isa allowance as they do not understand how they work.
Of 1,200 people questioned by moneysupermaket.com, 37 per cent stated that they had no intention of using an Isa this year.

Out of this number, 51 per cent stated this was because they could not afford to save, while 24 cent said that they avoided using their Isa allowance as they are uncertain about how to invest in them.

Kevin Mountford, head of banking at moneysupermarket.com, said that for UK taxpayers it makes sense to invest in an Isa, especially if your earnings fall into the higher taxation bracket.

It is currently a difficult time for savers, the price comparison site has reported, as the average rate on the top five savings accounts had fallen to 2.89 per cent at the start of this month. This falls short of the 3.63 per cent needed in order to make savings work for basic rate taxpayers.

©2012 MoneyBlog. All Rights Reserved.

It has been reported that Northern Rock is scrapping their 100 per cent savings deposit guarantee in three months time.
The guarantee will be removed, according to the Treasury, on May 24th, meaning only the first £50,000 of any consumer’s money will be secure in the event of a collapse – the standard guarantee under the Financial Services Compensation Scheme.

The guarantee was introduced in September 2007 to increase consumer confidence and prevent a run on the bank as it encountered credit crunch difficulties.

Lord Myners, financial services secretary commented: “The government’s actions to stabilise Northern Rock protected the savings of millions of families and the jobs of thousands of workers.

“The guarantee of retail deposits was a vital step that restored confidence in Northern Rock’s operations when its customers were worried about its soundness.”

Earlier this year, Northern Rock was split into two – essentially creating a ‘good’ bank and ‘bad’ bank ahead of an intended sale back to the private sector.

©2012 MoneyBlog. All Rights Reserved.

The latest figures show inflation is continuing to rise. Savers need to seek out the best place for their money. Still, millions are shunning the ISAs this tax year and throwing money down the drain.
The Retail Prices Index, or the measure of inflation that includes mortgage costs and that is most commonly linked to savings and investment products, jumped from 2.40% to 3.70% in January for the second month in a row. We therefore need to be earning higher returns on our savings to prevent rising prices from eroding the true value of our money.
A basic rate taxpayer needs an account paying at least 4.62% or more in order to earn a positive return after tax and inflation is taken into account, while someone in the top-rate band needs an account paying at least 6.17%.
The problem is, with the Bank of England base rate still at its historic low of 0.5%, such returns aren’t easy to achieve.
Cash ISAs do help because, unlike standard savings accounts, the interest you earn isn’t taxed. However, despite the value of this tax-break research from moneysupermarket.com found that 37% of people aren’t planning on using their ISA allowance before the tax year ends on 5 April.

©2012 MoneyBlog. All Rights Reserved.

New smart energy technology has been unveiled which could help households reduce their gas and electricity bills.

The new invention was shown at the Consumer Electronics Show in Las Vegas, and would allow consumers to have more control over the amount of energy they use. It is one step forward from the Smart Meters, which allow people to monitor their real time energy usage and the amount it costs.

Using this new technology, households will be able to remotely turn off their heating by sending a text message. The system is intelligent enough to understand when the house needs heating and hot water. All the user would have to do is press the ‘occupancy button’ which can be installed in the bedroom or by the front door and the technology will then learn when to turn on the heating.

The chief executive of PassivEnergy, Colin Calder, who invented this technology, said: “Over the last few years consumers have adopted technology at an astonishing rate…But their homes have been left behind. Houses are still run off electromagnetic systems which are decades old.”

He added that this system could be a huge benefit to the elderly.

PassivEnergy believes that if people use the technology the correct way, it could save 20 per cent off annual energy bills.

©2012 MoneyBlog. All Rights Reserved.