Martin Lewis has issued a warning to anyone with a cash ISA that millions of people with this type of account are being underpaid.
Cash ISAs are tax-free savings accounts, meaning that you pay no tax on the interest you earn on your savings. But Martin explained in his latest MoneySavingExpert newsletter that anyone who has or is considering opening a cash ISA should carry out three important checks to ensure they are making the most of their savings.
Firstly, the finance pro warned that normal savings accounts "beat" cash ISAs for most people, as your Personal Savings Allowance means that you would need to have £34,500, or £17,500 if you're in the higher tax bracket, in a top easy-access savings account before you earned enough interest to start being taxed on it. People on the basic 20% tax rate can earn up to £1,000 interest a year on any savings account tax-free, while those on the higher 40% rate can earn £500 a year.
