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ISA benefit 'negligible'

Published: 20/01/2010

The benefits of putting savings into an ISA account rather than a regular savings account are negligible, according to an industry expert.

Andrew Hagger of Moneynet.co.uk, highlighted that on savings of £3,600, the additional annual interest benefit from a variable rate ISA is only £8.72.

He said: "When you compare the net return from best buy ISA products against best buy taxable savings accounts, you really have to question if it's worth the effort for basic rate taxpayers."

Mr Hagger blamed the "current low interest rate landscape" for reducing returns on savings.

High rate taxpayers are able to make a little more on ISA savings, with an ISA offering a benefit of £12.34 compared to the regular savings account.

Mr Hagger looked at the best variable ISA and the best variable savings account on the market, which at the time were offered by Standard Life and Scottish Widows Bank respectively.

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