Compare Cash ISA deals!
A Cash ISA can be a good way of saving money, as ISAs usually offer a higher interest rate than standard savings accounts, and is not subject to tax.
Deposit Plan Offer
Looking for a Capital Protected alternative to Cash?
Potential 23% after 3 years
- Potential 23% if the FTSE 100 rises by any amount after 3 years
- Equivalent to 7.67% per year
- 3 year term
- Available as cash ISA, non ISA or ISA transfer
- Capital Protected – receive your initial capital back at the end of the term no matter how the FTSE 100 performs
Cash ISAs for Over 50s
Cash ISAs for over 50s allow you to protect some of your savings from the taxman, maximising your money. You can save up to £20,000 in a cash ISA in the 2018/19 tax year.
Benefits of cash ISAs for over 50s
- Simple to understand
- accessibility is more flexible than that of pensions
- tax-free if used as retirement income
Drawbacks of cash ISAs for over 50s
- additional rate taxpayers receive 50% income tax relief on pension contributions, as opposed to 40% on cash ISAs
- much lower annual contribution limits than pensions
- entirely reliant on personal contributions
- can affect pre-retirement benefit entitlement
Should I opt for a cash ISA over a pension?
Everyone has different savings goals – some of us are at the stage in life where we’re saving with retirement firmly in mind, while others have shorter-term goals. If this is the case, an ISA might be a good way to save some of your money for the short term.
However, it’s best not to put all your eggs in one basket, so to speak, and most financial advisers would say that it’s best to spread your money around when it comes to retirement savings. As with all investments, it’s best to seek independent financial advice if you’re unsure.
Make the most of the cash ISA for over 50s allowance by comparing some of the latest deals from leading UK providers.
Whether you choose a cash ISA or Stocks and Shares ISA, or both, you won’t have to pay a penny of tax on the interest you earn. Cash ISAs for over 50s offer a variety of features and interest rates, so make sure you’re taking advantage of competition in the market by finding the best deal for you.
In the 2018/19 tax year you can save up to £20,000 under your ISA allowance.
Our free comparison service makes it easy to compare ISAs side by side to see which ones offer the best rates.
What is a cash ISA?
The cash ISA limit for the 2024/25 tax year is £20,000 per person and you need to be a UK resident or Crown employee aged 16 or over to open an account.
You can only have one cash ISA per tax year, but you can also have a different type of ISA, known as a stocks and shares ISA, simultaneously.
What are the benefits of a cash ISA
- No income tax – you don’t pay tax on any interest you earn from the cash in your ISA
- Easy access – if you choose an instant access cash ISA (rather than a fixed-rate cash ISA) it’s a convenient way to save at a good interest rate while retaining fast and easy access to your money, should you need it
- No need to declare – you don’t need to declare your cash ISA on your tax return
- Straightforward transfers – you can transfer your cash ISA to a different provider to get a better rate of interest.
How much can I save with a cash ISA?
- Saving rate taxpayers – you would usually pay 10% tax on interest earned from your savings. In a cash ISA this savings interest is tax-free
- Basic rate taxpayers – you would usually pay 20% tax on interest earned from savings. In a cash ISA this savings interest is tax-free
- Higher rate taxpayers – you would usually pay 40% tax on interest earned from savings. In a cash ISA this savings interest is tax-free
- Additional higher rate taxpayers – you would usually pay 50% tax on interest earned from savings. In a cash ISA this savings interest is tax-free.
How do I choose a cash ISA?
There are several factors to consider when choosing a cash ISA:
- Do you want easy access to your money? An instant access ISA might be the right choice for you, as long as you’re willing to accept a slightly lower rate of interest
- Are you happy to lock away cash for a set period of time? Fixed-rate cash ISAs might be a better option as they have the potential to offer a greater return long-term
- Do you have a lump sum to invest, or are you planning to make small regular payments? Different ISA providers offer different minimum deposits ranging from just one pound to several thousand pounds
There is no single ‘right’ cash ISA choice for everyone – it’s a case of weighing up the different factors and considering which product and provider best meets your overall needs.
6 Cash ISA Tips
- You can only have one type of cash ISA in each financial year, so research your options carefully. Whether you choose a fixed-rate or instant access cash ISA, give some thought to your savings goals beforehand to help you determine what’s right for you
- Remember that you can’t carry your tax-free allowance over from one financial year to the next – so if you’ve got enough cash to hit your limit, stash it in an ISA. The cash ISA allowance for the financial year 2024/25 is £20,000.
- Because a cash ISA operates on a year-long basis, it’s a good way to try your hand at saving without committing yourself to anything long-term. It’s also a great way to save for a specific event like a wedding, holiday, or starting a family
- Once you’ve set up your cash ISA, make sure you still keep an eye on the interest rates available from other providers. You can usually switch cash ISA providers without incurring any charge
- To make life easier, set up a direct transfer from your current account into your cash ISA to make sure that you put aside a certain amount each month without fail
- Don’t forget that you’ve got the option of opening a stocks and shares ISA, too. For more on this, see our page on stocks and shares ISAs.
Can I transfer my cash ISA to a new provider to get a better deal?
But remember that if you withdraw your cash and then open another ISA, you will lose all your tax-free benefits.
To transfer an ISA without losing any tax benefits, ask your new ISA provider to arrange the transfer of funds on your behalf.
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