14 Mar 2018 New research from Charter Savings Bank reveals multiple Cash ISAs are not adding up for savers, who are risking leaving their money to stagnate in low interest rate paying accounts.
Its study found one in five of savers aged 55 plus have five or more Cash ISA accounts, but less than half (48%) know exactly how much is in these accounts and actively check and manage their savings. Women over 55 are more aware of the amount they have in savings than men (54% compared to 44%).
The amount of money sitting in low interest rate paying accounts is substantial. A fifth of those who don’t know how much is in their Cash ISA accounts, estimate that they have between £10,000 and £30,000 sitting in them. An average of one in seven estimate that they have more than £30,000 in inactive accounts, of which 18% are women compared to 13% of men.
Over a third of those who have opened more than one ISA, did so because they had different rates. For others, however, the number of ISAs they hold has increased because they’ve opted to open a new account each tax year.
Charter Savings Bank is offering more choice with its Mix & Match ISA, enabling savers to open as many different types of Cash ISAs as they want within one wrapper, and is using the industry’s eISA system to ensure most savers switching providers will benefit from a fast transfer.
Table one: Reasons for holding multiple Cash ISAs
|Reason||Percentage of over 55s who have multiple ISAs for this reason|
|ISAs have different rates||36%|
|The number has built up as I have tended to choose to open a new ISA account for each new Tax Year||27%|
|ISAs have different product features||26%|
|I forgot I had some||5%|
|Too complicated to transfer them to one provider||2%|
Source: Charter Savings Bank 2018
One of the reasons savers over the age of 55 do not have multiple ISAs, is because it can be difficult and frustrating managing multiple accounts with different providers. Nearly three in ten find it annoying managing different rates, while a similar number find managing multiple fixed-term maturities frustrating.
Around a quarter (24%) do not like managing the administration side of multiple accounts and remembering various log in information, while two in five struggles to remember bonus expiry dates (22%) and different notice periods (21%).
Charter Savings Bank’s research found 59% of savers would like the option to split their savings across a range of different accounts to suit their needs.
Paul Whitlock, Director of Savings, Charter Savings Bank says: “It can be easy for savers to lose track of accounts once they’ve been opened, and the longer they’ve been open the more likely it is that something might have changed. Savers could be missing out on better returns if they forget about their accounts.
“With ISA allowances increasing over the years, it’s possible for savers to have substantial deposits in them so it makes sense to take action. It’s easier than ever to transfer Cash ISAs and so it makes sense to make the most of the simplicity to bag a better rate.
“Our Mix & Match ISA enables customers to split their allowance among different types of accounts so they can fix the rate on some of their ISA allowance while leaving the rest in easy access, all with highly competitive rates.”
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