Over 50s are being urged to not only take full advantage of the new ISA limit but also consider an ISA transfer to ensure they enjoy the highest rates of interest on their money.

Under the changes, over 50s can top-up their ISAs through their existing provider only, but to take full advantage of the new allowances, moneysupermarket.com is urging over 50s to consider using an ISA transfer to switch to an account offering a higher interest rate.

Commenting, Kevin Mountford, head of banking at moneysupermarket.com, said: “Those with savings would be wise to make use of their cash ISA allowance, and those who already have an ISA should top it up when possible now the annual allowance has been increased to £5,100.”

Research by the price comparison website has found that 31 per cent of over 50s have never switched savings accounts, which means nearly a third of over 50s could have missed the opportunity to earn more money by switching to a higher interest account.

For instance, calculations by moneysupermarket.com suggest savers who have used their full cash ISA allowance in the same account for the past ten years could have missed out on more than £3,000 in additional interest by not transferring their money to an account paying the highest rate.

From October 6, over 50s can invest an additional £1,500 in a cash ISA and Kevin Mountford says despite inflation and the base rate being at an all time low, cash ISAs are paying around two per cent in interest, “so they are still very good proposition for savers.

He added: “It’s more important than ever to ensure your savings are working hard for you. Saving within an ISA is the first step to easy cash – taking the time to swap your money to the highest paying ISA is where savers need to be clever.

“Banks and building societies have started to get their acts together and most providers now provide electronic transfers, making switching a pain free experience.”

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