Millions unclear on new ISA limits, warns Halifax

29 April 2014

Halifax estimates close to one in four ISA holders (23%) are unaware of the new ISA limits that will increase their total allowance to £15,000 in July, according to a new survey from Halifax.

The survey reveals the likely impact on saving habits resulting from the new ISA rules contained in the budget. Around one in three (32%) cash ISA holders expect to save more as a result, while close to half (52%) believe it will make no difference to their saving habits. 

The potential for confusion remains strong. While 61% of people surveyed were able to identify some of the financial benefits in the new rules, such as the new higher limits, 28% would like more help in understanding the changes.

Typically knowledge of the changes is lowest among younger people. Some 40% of people between 18-24 and more than one in three (36%) 25-36 year olds are unaware of the changes to the ISA rules.

Richard Fearon, Head of Halifax Savings, said:

“The new ISA rules have the potential to transform the level of UK’s savings. However, in the short term there remains confusion about how much people can save in their ISA and when. As a result, many savers could already be missing out on tax-free savings by being unaware that it’s possible to start saving now and top up to the full limit when it becomes available in July.”

Halifax was the first bank to change its rules so customers can take advantage of the increased £15,000 limit, announced in the budget in March. Savers opening a fixed rate ISA before the new limits begin in July can benefit from tax free savings from the beginning of the tax year and still be in a position to top up to the £15,000 limit when it becomes available in July 2014, less any subscriptions already made to a stocks and shares ISA.

Best buy ISAs from Halifax

Halifax ISA range includes an 18 month fixed rate ISA paying 2%, a 2 year at 2.05% and a three year at 2.25%.

The Halifax Junior ISA remains market leading two years after its launch, continuing to offer the same best buy rate of 6%.

 Our full range of ISAs are:

          Fixed rate ISA Saver 1 year – 1.65%

          Fixed rate ISA Saver 18 months – 2%

          Fixed rate ISA Saver 2 year – 2.05%

          Fixed rate ISA Saver 3 year – 2.25%

          Fixed rate ISA Saver 4 year – 2.4%

          Fixed rate ISA Saver 5 year – 2.5%

          ISA Saver Variable - 1.5%. Includes 1%,12 month fixed bonus

          ISA Saver Online - 1.55%. Includes 1.3%, 12 month fixed bonus (opened online)

          Junior ISA – 6.00% if an adult cash ISA is held or child is 16 and over, otherwise 3%.

 Key features of Halifax’s ISA Saver Fixed products:

          Minimum balance of £500. Account must be funded within 60 days of opening

          Maximum deposit up to current annual ISA allowance plus transfers of previous years’ allowance

          Available in branch, over the phone and online

          Terms available: 18 months, 1, 2, 3, 4 and 5 years

          Interest remit is allowed or it can be capitalised to the account.

          Interest paid annually or monthly

          Part withdrawals are not allowed

          The customer will receive a maturity letter approximately one month before the account matures, informing them of their options and asking them to provide maturity instructions.

          For further details, and to apply, visit a branch or go to www.halifax.co.uk/savings

Key features of Halifax’s Variable Rate ISAs

          Minimum investment £1

          Maximum deposit up to current annual ISA allowance plus transfers of previous years’ allowance

          Interest paid annually

          The interest rate is variable, but for the first 12 months the rate also includes a fixed bonus which will not change during the 12 month bonus period

          No notice for closure is required. Closure can be made by branch or post

          Transfers in allowed

          For further details, and to apply, visit a branch or go to www.halifax.co.uk/savings  

Rates and product detail quoted are correct as at 18.04.14 and are subject to change.

Halifax ISA limits