As the new tax year begins, ISA providers are rolling out fresh incentives, including cash bonuses and enhanced rates, in a bid to tempt savers.
First Direct has launched a new £100 cash incentive for ISA customers, which could be combined with its existing current account switching bonus, offering new customers the opportunity to claim a potential total of £275.
The digital bank offers £100 to new and existing customers depositing or transferring at least £10,000 into a First Direct variable cash ISA by 4 May. A First Direct current account is required for the bonus payment.
This ISA bonus can be combined with a £175 switching incentive for eligible customers moving their current account via the Current Account Switch Service (CASS), bringing the total potential reward to £275.
To qualify for the £100, customers must either transfer an ISA from a non-HSBC group provider into a First Direct cash ISA with the qualifying amount, or, for existing First Direct ISA holders, deposit at least £10,000 in new funds.
'New funds' are defined as money not held across any First Direct, HSBC, or M&S Bank account before 6 April 2026. Rewards will be paid on 31 July.
These incentives highlight the increasingly competitive landscape for savers, as financial institutions actively vie for new deposits in the fresh tax year.
Barclays also announced on Tuesday that it has increased rates on some savings products by as much as 0.40 percentage points.
The increases include a rate of 4.20 per cent on its one-year flexible cash Isa, up from 4.00 per cent previously.
Barclays’ Premier 18 month flexible cash Isa has a new rate of 4.40 per cent, up from 4.10 per cent.
It is also offering a rate of 3.70 per cent on its one-year fixed bond, up from 3.30 per cent.
Barclays is also offering £50 to £600 for transferring Isa balances, subject to terms and conditions and certain steps being taken by 30 April.
Sian McIntyre, head of savings at Barclays UK, said: “We know now is one of the most popular times to open a cash Isa account, as people open new products after their allowance has reset.
“Given recent market volatility and concerns over rising costs, more people than ever may decide the best place for their savings is a predictable and tax-efficient fixed cash Isa.
“It’s important to consider what product works best for you and research what’s on offer. For example, you might want to maximise your interest rate, or the flexibility to make penalty-free withdrawals may be more of a priority.”
While cash savings accounts give savers certainty over the returns they receive, over the longer term, funds held stocks and shares may potentially outperform those held in cash.
However, the value of investments can go down as well as up and investors may get back less than they paid in.
The conflict in the Middle East has changed expectations for financial markets, with interest rates predicted to potentially remain higher for longer.
The new tax year, which started on 6 April, is also a “last chance” for adult savers aged under 65 to stash their full £20,000 annual Isa allowance in cash.
From 6 April 2027, changes will mean that, while the total annual Isa allowance will still be £20,000, adults aged under 65 will only be able to put away up to £12,000 in a cash Isa, with the remaining £8,000 allowance potentially going into stocks and shares.
Savers aged 65 and over will retain the annual £20,000 subscription limit for a cash Isa.
Ms McIntyre added: “With no clear consensus on what will happen with the Bank of England base rate this year, people preferring a cash Isa can take advantage of the fact you can split your allowance across multiple products.”
Meanwhile, a recent survey for Triodos Bank UK indicated that 44 per cent of people would like their savings to support projects benefiting communities across the UK.
Around a third (34 per cent) of people said they would welcome the opportunity for their local community to pool money and help invest directly in local projects, according to the survey of 2,000 people across the UK in February and March, carried out by Opinium.
