First time savers should try ISAs says moneysupermarket

29 April 2009 / by Rebecca Sargent
ISAs could offer the best potential returns for first time savers, comparison site has claimed.

The comparison site claims that deflation could be the perfect time for people to start building up their savings, and that one of the best ways to do this is through a regular saver ISA.

Commenting, Kevin Mountford, head of banking at said: "Traditionally many people build up their savings in a regular savings account, and wait until the end of the tax year to squirrel away the lump sum in their ISA, but they could be missing a trick.

"Anyone looking to start saving for the first time should consider putting their cash straight into a regular saver ISA – they work just like a regular savings account so you can stash your cash away in small monthly increments, but the rates on offer can be far more competitive and you don't pay any tax on your returns."

According to Mr Mountford, the optimum amount for under 50s to save into a cash ISA each month is currently around £300, until April next year when the cash ISA limit will increase from £3,600 to £5,100, and monthly payments could increase to £433.

According to the British Bankers Association, the ISA increase, announced in last week's Budget, "will encourage people to save for their financial futures."

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