ISAs worth a measly 73p in tax savings

Making the effort to put your savings into a tax-free account is worth a mere 73p per month, according to research by Moneynet.co.uk.

The additional returns on a tax-free ISA compared to a standard savings account for a basic-rate tax payer are equivalent to just £8.72 per year on a £3,600 investment, the financial advice site found.

This figure increases to £12.34 on a £5,100 ISA.

Fixed-rate ISAs fare marginally better, but are still only worth £14,76 per year more on a £3,600 investment, and £20.91 on £5,100.

“While I appreciate that the tax free status of your ISA savings is ring fenced and carried forward for future years, at the present time consumers are certainly not going to be falling over themselves for such measly returns on their cash,” said Andrew Hagger, Moneynet spokesperson.

“The benefit for high rate taxpayers is slightly more worthwhile, but for those not fortunate enough to earn sufficient to qualify for higher rate tax, they are struggling to supplement their income particularly if they are reliant on their savings nest egg.”

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