Tax-free savings 'only give 73p more'

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Tax-free savings 'only give 73p more'

Wed 20th Jan 2010

Choosing to put your money in a tax-free savings account or Isa will give you a return as low as 73p a month compared with a standard account, according to Moneynet.co.uk.

When the returns for a basic rate taxpayer who puts their investment into a variable rate Isa is compared with the same sum in a best buy taxable account, the additional interest amounts to just £8.72 a year on a £3,600 investment.

Andrew Hagger of Moneynet.co.uk said that although the tax-free status of an Isa is ring-fenced for the future, he believes that "at the present time consumers are certainly not going to be falling over themselves for such measly returns on their cash".

For others who are struggling with their money after Christmas, Moneynet.co.uk advises them to think about taking out an authorised overdraft if they are worried that they will slip over their limit before payday.

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