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Stash more cash in the New ISA

Finally, savers have got some good news to shout about regarding keeping more of their hard-earned cash away from the tax man. As of 1st July, New Cash ISAs will triple their allowance, meaning customers can save up to £15,000 a year tax-free.

Currently, the amount that you can deposit into a cash ISA is £5,940 in any given tax year. However, the new allowance will far exceed this, meaning that those lucky enough to have the cash to stash, will be able to do so in far greater amounts. What’s more, if you have a stocks and shares ISA then you can move your money freely into a cash version or even have a mixture of both, depending on your circumstances.New ISA

This is welcome news in particular for savers who need access to their cash because the New ISA (NISA) offers customers a simpler way to save tax-free with access to their cash when they need it. It also means that, those with larger amounts to save no longer have to place their cash in risky stocks and shares ISAs, which, although potentially offer higher gains, are balanced by greater risks.

If savers are expecting greater returns from the NISAs, they will be left disappointed however, as the interest rates show no signs of increasing on the current paltry rates offered by accounts. You may be able to triple the amount you can save tax-free but you will not be able to increase the amounts you earn in interest rates as the banks and building societies continue to cut their returns.

With average interest rates on NISAs hovering around 1%, it will be difficult for customers to match the rising costs of living as inflation stays at 1.5%. Despite the gloomy outlook for interest rates, it may still benefit customers to take advantage of the NISA as it will allow them to ring-fence their cash in a tax-free account ready for when the interest rates improve in future tax years.

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