Nationwide

Nationwide

March 12, 2012 07:54 ET

Cash ISA Savers Losing Out on GBP 500 Million in Interest ...by Not Fully Utilising Their Annual Cash ISA Allowance

LONDON, UNITED KINGDOM--(Marketwire - March 12, 2012) - Cash ISA savers are losing out on £500 million in interest by not fully utilising their annual cash ISA allowance, Nationwide Building Society has found.

In the current tax year ending 5 April 2012, people can save up to £5,340 in a cash ISA. There are 12 million cash ISA subscribers1, with an average subscription per account of £3,1902 - a short fall of £2,150. Using the average cash ISA interest rate across the industry3, it means cash ISA savers are losing out on £500 million of extra interest4.

Nationwide encourages all savers and investors who pay tax to make the most of their annual ISA allowance. Not everyone has an ISA and many others do not necessarily use their full allowance. The Society has filmed a short ISA guide video (http://youtu.be/MEoXxTZc5nU) featuring money expert, Michelle Slade, and Nationwide's head of savings, Richard Marriott, to remind savers and investors of the benefits of having an ISA and how easy it is to open one. Journalists are welcome to embed the video onto their websites.

To view images associated with this press release, please visit the following link: http://media3.marketwire.com/docs/773527_images.pdf

Nationwide allows cash ISAs from other providers to be transferred to any Nationwide cash ISA, while also promising that it will pay interest on the date it receives the transfer application (provided funds are free to move and not subject to a notice period) - a move that has already benefitted savers £1.6 million in the past year5.

Richard Marriott, head of savings at Nationwide, said: "ISAs are an absolutely great thing. For savers, they're fantastic because you get all of the interest you earn on your savings account. On most savings accounts, you have to pay tax on the interest, but you get to keep it all in an ISA.

"Our research shows that savers are losing out on more than half a billion pounds of interest per year - that's an enormous amount of money and it works out at £50 per person. People should really maximise the amount they save in an ISA if you can. You should also remember that each ISA limit is an annual limit; if you don't use it, you lose it."

About Nationwide Building Society:

• Nationwide Building Society is the world's largest building society, the UK's second largest savings provider and third largest mortgage lender. It is also a major provider of current accounts, credit cards and personal loans.

• With around 16 million members, Nationwide has a relationship with almost a quarter of the UK population. In the first half of 2010/2011 alone we helped 10,000 people buy their first home.

• Since the credit crunch began in 2007, Nationwide has remained profitable against a very difficult economic environment. In the year 2010/11 Nationwide made a strong underlying profit of £276 million - up 30% from the previous year.

• Our strong financial performance and prudent business model meant that Nationwide was included in Global Finance magazine's Top 50 Safest Banks in the World, one of only three UK institutions in the Top 50.

Notes to editors:


1 Cash ISA subscribers in 2010/11 (last full tax year): 11,926,000.

2 Source: HMRC.

3 The average cash ISA interest rate across the industry is 2.2%. Source: CACI Current & Savings Market Database at June 2011.

4 The basic interest calculation used by Nationwide: (balance/deposit x rate x days remaining until the end of the calendar year) / total days in the year.

Cash ISA
sub-
scribers
2010/11
11,926,000
Cash ISA
sub-
scribers
2010/11
11,926,000 Interest earned by all subscribers
Cash ISA
annual
sub-
scription
limit
5,340 Average
sub-
scriptions
per
account
(HMRC)
3,190
Current
average
cash
ISA
interest
rate
(industry)
2.20% Current
average
cash
ISA
interest
rate
(industry)
2.20%
Interest
earned
(whole
year)
1,401,066,480 Interest
earned
(whole
year)
836,966,680 Difference 564,099,800

5 http://www.nationwide.co.uk/mediacentre/pressreleases/viewarticle.htm?id=1849

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