Savers showing little interest in new tax benefit

JUST a tiny percentage of savers in the UK are planning to take advantage of increases to the tax-free savings allowance which comes into force in April, research showed today.

The annual Isa allowance is rising from 7,200 to 10,200 from the start of the new tax year on 5 April, having already increased for the over-50s in October last year.

But only 15 per cent of people said they planned to take advantage of the new limit, with 25 per cent admitting they did not know it had changed, according to National Savings and Investments.

John Prout, sales director at NS&I, said: "The fact that all interest earned in an Isa remains tax-free means it's a must-have product for people looking to maximise their savings.

"Understanding the allowances and reviewing the terms of the product is vital for savers. With less than two months to go until the end of the tax year, there is no time like the present for everyone to benefit from tax-free savings."