The new financial tax year starts on April 6, 2024, so savers have a few weeks left to make the most of their 2023/2024 tax-free savings allowance.

In this month’s column, we guide you through the benefits of ISAs and shed light on one vital change that the Chancellor made in last year’s Autumn Statement.

ISAs have long been hailed as one of the most efficient ways to save and invest money in the UK.

Offering a range of benefits, ISAs provide people with a tax-efficient means of growing their savings over time.

From flexibility to tax advantages, let's delve into the various benefits that ISA savings accounts offer.

Tax-Free Savings: One of the main attractions of ISA savings accounts is their tax-free status. Unlike traditional savings accounts, where interest earned is subject to taxation, ISAs allow individuals to save without paying income tax on the interest earned.

This means that any returns generated from ISA investments remain entirely yours to keep, providing a boost to your savings over time.

Flexibility: ISAs come in various forms, offering flexibility to suit different financial goals and preferences. From Cash ISAs to Stocks and Shares ISAs, individuals can choose the type of ISA that aligns best with their risk appetite and investment objectives.

Whether you prefer the security of cash savings or the potential for higher returns through investments, ISAs cater to a diverse range of needs.

Historically, savers have only been able to open one ISA in any given tax year, but in last year’s Autumn Statement, the Chancellor announced that from April 2024 savers can open multiple ISAs of the same type every tax year.

Annual Allowance: Each tax year, people are granted an annual ISA allowance, enabling them to contribute a total of £20,000 into ISAs (across all accounts) without incurring tax.

Any unused allowance cannot be rolled over into the next tax year, making it super important to act now if you have money to invest before the next tax year comes around.

Compound Interest: Another key benefit of ISA savings accounts is the power of compound interest. By reinvesting the interest earned on your savings, you can accelerate the growth of your wealth over time.

As interest is earned on both the initial deposit and any accumulated interest, the compounding effect can significantly enhance the value of your ISA investments, supporting you to reach your financial goals sooner.

Financial Security: Building a nest egg through ISA savings accounts can provide individuals with greater financial security and peace of mind.

Whether saving for retirement, a home deposit, or a rainy-day fund, ISAs can offer a secure and tax-efficient way to achieve your financial goals.

ISAs offer many benefits that make them an attractive option for savers looking to grow their savings while minimising tax liabilities.

With the current tax year ending in just a few weeks, I urge people to act now – spending just a short while reviewing your current tax-free savings allowance could make a big difference to your long-term savings pot.

If you’d like to find out more about the ISAs Saffron Building Society offers, please pop into branch and speak to us, or visit our website to find out more: https://www.saffronbs.co.uk/savings/savings-accounts/cash-isa-savings-accounts.

If you have a question or a topic idea for a forthcoming column then please email us at askjess@saffronbs.co.uk.