Birthdays are always a cause for celebration and the ISA (Individual Savings Account) first birthday on 6 April is no exception. To ensure many happy tax-free returns, Abbey National is marking the occasion with the launch of an Internet Cash ISA, the first from a UK high street bank.
From late April, customers will be able to apply for their Cash ISA online, view their balance and transfer money into the ISA from other Abbey National accounts, all at the click of a mouse. The service will be seamless, giving customers complete control of how they do business.
Ambrose McGinn, director of Retail E-Commerce, said: “It's all about giving customers choice. Abbey National is the first high street bank to offer an Internet Cash ISA with both online application and transactional capability. Our objective is to make customers' lives easier, and whether that is through their local branch, by telephone, at the ATM, or through the Internet, that is what we will do. And Abbey National offers an excellent Cash ISA rate of 6.65 per cent p.a. tax free.”
Abbey National customers have saved a total of £7 million in tax over the past year by opening ISAs. Surprisingly though, despite a dramatic increase in the awareness of ISAs since last year, a staggering 67 per cent of people are ‘not very likely’ to take advantage of ISA tax-free saving in this financial year. Ambrose McGinn comments: “This figure is quite alarming. With only 8 per cent of people surveyed saying they will definitely open an ISA this financial year, it is quite obvious that most people are still unaware of their benefits. We have made a good start supporting the government's aim to make life easier for people to save but there is still more to do. With the wide choice available, there should be an ISA to suit everyone's financial needs and to complement their lifestyles."
Public understanding has improved, however, with 80 per cent of people surveyed now knowing that an ISA is a savings vehicle, not an energy drink, as a similar survey 12 months ago showed.
Women and those over 55 have taken out most ISAs with Abbey National and they seem to be the groups most likely to take advantage of tax free savings. People on lower incomes or those with no current savings are yet to be inspired to take out an ISA. Abbey National ISA customers have beaten the taxman, saving themselves £7 million in tax in the last year. On 5 April 2000 ISA limits are decreasing from £7000 to £5000 for a maxi ISA and from £3000 to £1000 for a cash mini, so those considering an ISA should invest before the end of the tax year.