Martin Lewis has issued a one month countdown warning over ISA savings account. The Money Saving Expert founder said there was a looming deadline affecting all ISAs, be it a cash ISA, a stocks and shares ISA or a Junior or Lifetime ISA.
Speaking on the latest episode of his ITV show, the Martin Lewis Money Show Live, he said ISA holders had only one month left to max out their tax-free entitlement before it's too late. He urged viewers: "This is a one month ISA warning. You need to use your allowance by the end of the tax year, April 5, or you lose it.
“A Cash ISA is just a savings account where the interest is never taxed. You can put up to £20,000 in each year and once it’s in it’s never taxed. So you could put £20,000 in now if you’re lucky enough to have it and on April 6 put in another £20,000 and then in a year’s time another £20,000 and you would have £60,000 plus interest protected from tax.
“Which is why some people who’ve been doing it for years have hundreds of thousands of pounds protected from tax. And to be honest they’re the people it’s best for. Cash ISAs are best for bigger savers."
In an article on YorkshireLive, he went on to say that ISA accounts are best suited to those with huge savings. He suggested that those with less than £20,000 in savings would be best using a regular savings account as they tend to offer much better interest rates.
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Martin added: "Now, I’d say a minimum of around £20,000-plus. The reason it’s not worth it if you’ve only got £5-10,000 is because most people don’t pay tax on savings anyway. You can earn £1,000 of interest tax free under the personal savings allowance — £500 if you’re a higher rate taxpayer. So unless you have a lot of savings, you won’t earn that anyway and normal savings accounts rates are higher.”
The money expert said one of the best ISAs on the market currently was Barclays, which offered a 4 per cent interest rate and withdrawals at any time.
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