12th August 2015
Cash Isa balances have soared by 44% since the introduction of the new bumper £15,000 allowance according to Halifax.
The latest Halifax Savings Review found that customers have warmly welcomed the new limit, as the amounts being squirreled away into the tax-free savings wrapper have swelled significantly over the past 12 months.
The average balance of an Isa account opened in June 2015 was £10,299, compared to £7,143 in June 2014.
Additionally, when comparing June 2015 openings to the average balance of all existing Isa accounts, which sits at £5,170, the amount has more than doubled. This is despite seven in 10 UK savers stating that the Nisa allowance, introduced in July last year, has not encouraged them to save more.
While a quarter, at 25%, of savers do not currently have an Isa, Halifax customer data showed the positive affect that the new ISA allowance has had on savings habits for many.
It highlighted that while there has been an increase in the average savings balance across all customers over the age of 18, it is those savers between 25 and 34 who have increased their tax-free savings pot more than any other age group year on year. The average balance of a new Isa account for this age group has increased 48% to £5,455 from £2,823. Unsurprisingly, the older the saver, the higher the average Isa saving balance, with all customers over 55 now within less than £1,200 of their 2015/16 Isa limit on average.
Halifax also found that there has been an interesting shift in when people are adding to their Isa pots throughout the year, according to data published by the Bank of England. Since 2010, balances have tended to rise at the start of new tax year only, coinciding with the renewal of the Isa personal allowance, when ‘topping up’ is at the forefront of savers minds. However, the introduction of the Nisa saw balances increase through the latter half of the year in a break with previous trends.
Giles Martin, head of Halifax savings said: “We are delighted to see that many of our customers have taken the opportunity to save more tax-free over the last twelve months. It is clear from our customer data, which shows a 44% increase in the average savings balance of new Isa accounts in June 2015 compared to June 2014, that many people have the appetite, and more importantly the funds, to save more tax-free and have been making the most of NISA since it was introduced.”