ISA nest eggs growing in value
UK savers are putting more into their ISAs, with the average balance growing by 14 per cent to £8,949 over the year to January 2012, according to new research by the Halifax.
The national average ISA balance has been on an upward trend since February 2009, when it stood at £7,269, with the 2011 figure representing an increase of 23 per cent since that date.
ISAs now account for a third of national average pre-tax annual earnings of £26,871.
Older people are saving more in their ISAs than younger people, with savers above 65 years of age having an average balance of £14,400, 61 per cent above the average for all ISA savers.
In contrast, people in the 25 to 54 age bracket have an average balance of around £5,423, which is 40 per cent below the UK average.
Martin Ellis, economist at Halifax, said: “It is encouraging to see that in these tough times, savers are managing to build on their ISA balances, making use of the annual allowance.
“Indeed it is impressive that customers, on average, have an ISA balance equivalent to a third of annual gross earnings.
The Halifax reported a significant difference in average cash ISA balances between different regions of the UK, with the East of England having the highest average cash ISA balance of £9,724, while Scotland has the lowest, at £7,031.
With the 2012-13 tax year on the doorstep, a surge of new ISA products have come onto the market in recent weeks.
One of the latest comes from the Post Office, which has launched a Premier Cash Isa paying 3.01 per cent tax-free/AER.
This includes a bonus rate of 1.26 per cent which expires after 18 month, when the rate will revert to 1.75 per cent.
The product is available online from 6 April and by phone or in Post Office branches from 7 April.
Between £100 and £5,640 can be invested during the tax year, and existing ISA balances can be transferred into the new product.
Up to two free withdrawals are allowed each tax-year either by phone or by post.