Cash ISA savers acting early in tax year – Paragon Bank

Forty-six per cent of active cash ISA savers are seeking to invest early in the new tax year to take advantage of the tax-free wrapper, according to new research from Paragon Bank.

A survey of over 1,600 active cash ISA savers revealed that a further 26% will spread their investment across the year, with 5% leaving it just before the end of the tax year to open their ISA account. The remaining 23% indicated they would utilise a mix of the above methods.

Paragon has reported a surge in cash ISA savers moving early, after the bank experienced its busiest ever week for cash ISA applications as the new tax year started. Total ISA applications from 6 April were 40% higher than the corresponding seven days in 2023, and a record overall.

The bank’s own savings data has also highlighted that savers are making more use of their subscriptions early. The average balance deposited in Paragon fixed rate cash ISAs during the week following 6 April was 45% higher than the average balance in the corresponding period in 2023.

Separately, the research found that 67% of active cash ISA savers fully utilised their £20,000 ISA allowance in the last tax year, with two thirds (66%) also planning to invest the full allowance during the new tax year.

“The 2023/24 tax year was one of the strongest ISA seasons on record and the new tax year has carried on in a similar manner,” said Paragon savings managing director, Derek Sprawling.

“We had our busiest ever day for applications on 8 April as savers looked to open their new ISA early in the new tax year to take full advantage of the tax-free wrapper.

“It is encouraging that nearly two-thirds of our active cash ISA savers fully utilised their £20,000 allowance last tax year, with a similar proportion looking to do the same this year.”

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